- SWFX market sentiment is 60% bearish (-1%)
- 51% of pending orders in the 100-pip range are to BUY the Greenback
- Upside target for today around 113.10
- Upcoming events: US Unemployment Claims, Chicago PMI
Factory activity in Chicago strengthened again by the end of the year, according to the MNI survey.
Market News International stated that its PMI of manufacturing sector in Chicago jumped to 67.6 in December, after 63.9 reading in the previous month. The survey also showed that businesses were shoring the stock level to support lead times and prepare for next year's product launches. However, the employment rate decreased, but remained higher than in post-crisis times.
Quiet session
No fundamentals that could have an effect on the USD/JPY pair are scheduled for this session.
USD/JPY points to recovery
The strong momentum south that was driving the US Dollar early on Thursday stopped when the rate reached the monthly PP at 112.70. It subsequently edged higher, but the breached trend-line provided enough resistance to reverse the pair back south.Converging technical indicators suggest that the Greenback should finally regain some lost positions against the Yen in this session. Thus, the base scenario favours appreciation up to the 113.00 area where the aforementioned trend-line, 50.0% Fibo retracement and the 55–hour SMAs are located.
Given that this is the last trading session of 2017, it is unlikely that bulls are able to breach this important resistance. Meanwhile, a fall is not expected in this session; however, the rate could likewise consolidate near the 112.80 mark.
Hourly chart
Bears have dominated the pair during this week with the most significant fall during the last two sessions. Yesterday's strong movement south was not even allayed by the 55-day SMA located circa 112.95, as the pair managed to push as low as the monthly PP during the day.
It is likely that the US Dollar closes this session in the red area. Losses, however, should not exceed the weekly S1 at 112.56.
Daily chart
SWFX market sentiment remains bearish, as 60% of open positons are short (unchanged from Thursday). Meanwhile, 57% of pending orders are to buy the US Dollar (+2%).
OANDA traders are bearish on the pair, as they are holding 53% short positions in this session (+1%). Market sentiment of Saxo Bank has become bullish with 53% long positions.