- SWFX market sentiment is 58% bearish
- 56% of pending orders in 100-pip range are set to sell
- 52% of all pending orders are to sell the Greenback
- Upcoming Events: US HPI m/m, US CB Consumer Confidence, US Richmond Manufacturing Index, Japan's SPPI y/y
Monday's Markit survey showed that the preliminary PMIs for the US manufacturing and services sectors almost matched analysts' forecasts and had little initial impact on the USD/JPY currency pair. Just after the data were released, the US Dollar edged slightly higher against the Yen to 110.954.
Markit revealed that the index for services activity in the United States came in at 54.2 in July, unchanged from the previous month, while the Manufacturing PMI rose to 53.2, above forecasts for a 52.3 reading. Sufficiently strong figures suggested that the country's pace of economic growth gained momentum, pointing to some signs for further expansion.
Minor releases prevail
Minor data releases prevail in this session, being published from both the US and Japan. The day will start with US House Price Index and Richmond Manufacturing Index at 1300GMT and 1400GMT, accordingly. The greatest significance, however, is put on US consumer confidence reported by the Conference Board at 1400GMT. Finally, this session will end with Japanese Services Producer Price Index scheduled for 2350GMT.
USD/JPY breaches junior channel
Contrary to expectations, the Greenback failed to reach the weekly S1 at 110.48. This downward momentum was disrupted by a momentum upwards of intermediate strength which occurred mid-session. Thus, a junior channel down which was formed on Thursday was breached, allowing the Greenback to edge higher. Pressured by the 55-hour SMA, the given currency halted near the monthly PP and had returned near the upper boundary of the junior channel by Tuesday morning. In case data on CB Consumer Confidence from the United States does not bring major surprises, it is likely that the rate enters a consolidation phase, remaining between the 55-hour SMA and the weekly S1.Hourly chart
The US Dollar remains pressured by bearish traders that gradually push the USD/JPY currency pair closer to the bottom boundary of the symmetrical triangle. Currently, the given pair has been stranded between the monthly PP and weekly S1 – a range that is unlikely to be breached in this session. Daily oscillators suggest that there is still some downside potential that could be realised today prior to edging higher within the following trading days.
Daily chart
The bearish market sentiment still dominates in this trading session, as the number of open positions remains unchanged from yesterday, i.e., 58%. Moreover, 52% of pending orders are to sell the US Dollar.
OANDA clients remain neutrally bullish on the US Dollar, as 54% of all open positions are long. Similar views are likewise held by Saxo Bank clients whose long positions amounts to 57%.