- SWFX market sentiment is 52% bullish
- 61% of pending orders in the 100-pip range are to BUY the Greenback
- Notable support near 110.20
- Empty first half of the week for fundamentals
The Greenback seems to have found support against the Japanese Yen on Wednesday morning. During the move the pair broke the resistance of a descending channel down pattern. However, that does not necessarily indicate at an end of the decline.
The Greenback rose temporary against the Japanese Yen, following mixed US economic date on Friday. The USD/JPY currency pair added 28 base points or 0.34% to reach another starting point for a decline.
The US retail sales rose in December, as consumers bought more goods and the previous month's figures were revised up, indicating that the country's economy finished 2017 with solid momentum. The Commerce Department stated that retail sales increased 0.4% in December, following an upwardly revised 0.9% gain previously.
Empty start of the week
The economic calendar for the week in regards to the strength of the USD/JPY currency pair is empty until Thursday. Due to that reason traders are most likely going to concentrate on technical aspects of currency fluctuation analysis.
However, swing traders should tune in for various swing trades scheduled to be covered by the Dukascopy research team during the week.
USD/JPY meets strong support
Similarly to other major currency pairs that include the US Dollar, it is apparent that the latter's weakness has allayed during the previous trading session.One factor that helped the Greenback to stabilise against the Yen is a support cluster formed by the monthly S2 and the weekly S1 circa 110.20.
Considering that the rate has surpassed the 55-hour SMA, it could signal to further advance. This upside momentum, however, could be stopped by the 100-hour SMA—a level which was being tested at the time of this analysis. It is likely that both barriers confine the Greenback for several hours.
Meanwhile, technical indicators are still in favour of a fall. In case this scenario is to occur, losses should be capped near the lower boundary of a four-month channel down near the 110.00 mark.
Hourly chart
By looking at the daily chart one sees that the pair is approaching the support line of a dominant long term channel pattern. Namely, the support is located just below the 110.00 mark. Due to that reason it is expected that this decline of might end at that level. Afterwards, a rebound and a formation of a new medium term pattern would occur.
Daily chart
On Wednesday morning SWFX traders were more on the long side, as 52% of open positions were bullish. Meanwhile, 65% of pending orders are to buy the Greenback (-3%).
The market sentiment of OANDA traders remains bullish with 62% long positions (+2%). Meanwhile, Saxo Bank clients are likewise bullish, as 54% (+1% of open positions are long
Spreads (avg, pip) / Trading volume / Volatility