- SWFX market sentiment is 57% bearish
- 54% of pending orders in the 100-pip range are to BUY
- Important resistance is located circa 112.70
- Upcoming events: US PPI and Core PPI m/m, US Unemployment Claims, FOMC Members Brainard and Powell to speak
The JOLTS survey showed that the number of the US job openings declined to 6.08M in August, from a downwardly revised figure of 6.14M in the prior month, facing negative impacts coming from the Hurricane Harvey.
Subsequent release of the Fed meeting minutes revealed that some central bankers remained concerned on persistently weak inflation growth, which is likely to determine the need of the interest rate hike.
US fundamentals in focus
The United States will release three sets of data at 1230GMT, namely the US Producer Price Index and Core Producer Price Index for the month of September and the weekly Unemployment Claims.
In addition, two members of the Federal Open Market Committee are to speak today at 1430GMT - the Federal Reserve Governor Lael Brainard is to participate in a panel discussion about monetary policy at the Peterson Institute for International Economics, while the Federal Reserve Governor Jerome Powell will deliver a speech titled "Prospects for Emerging Market Economies in a Normalizing Global Economy".
USD/JPY fails to break above 112.60
As it was expected, after reaching the weekly S1 at 112.19 traders tried to push the rate to the top. However, a combined resistance formed by the 55-, 100- and 200-hour SMAs in conjunction with the weekly PP at 112.81 expectedly neutralized this attempt. Moreover, the released FOMC meeting minutes showed some uncertainty regarding the need on another interest rate hike this year, which additionally devaluated the buck against all other major currencies.These facts suggest that the pair is unlikely to break in the northern direction today as well even if the US PPI will appear to be better than analysts expected. In support of this scenario speaks the fact that the average market sentiment remains 63% bearish. Plus the pair has formed a new descending channel.
Hourly chart
Given the pair's strong momentum downwards on Thursday morning, it seems that the US Dollar has finally managed to pick up speed against the Japanese Yen and thus end the direction-less movement sideways apparent for the last eight sessions.
Bears had already managed to push the Greenback closer to the 20-day SMA and the weekly S1 within the first trading hours today, demonstrating that there was still some downside potential ahead.
Daily chart`
The bearish market sentiment has remained the same level on Thursday, as the number of traders holding short positions is still 57%. In addition, 54% of pending orders are to sell the US Dollar (unchanged from Wednesday).
OANDA clients are increasingly bearish on the US Dollar, as their positions are 58% short (+1%). In addition, 52% of Saxo Bank traders are currently holding short positions (unchanged from Wednesday).