- SWFX market sentiment is 72% bullish (-2%)
- 55% of pending orders in the 100-pip range are set to BUY
- Strong resistance near 109.30
- No fundamentals in this session
Economic activity in the US services sector was the strongest in more than 12 years, supported by rising new orders, suggesting that the economy sustained the strong momentum in the beginning of the year. The ISM survey showed that its non-manufacturing PMI jumped to 59.9 in January, from 55.9 in the prior month.
The US economy kept expanding even before the stimulus from a $1.5T tax cut program has begun to filter through. However, that is likely to cause some concerns that the country's economy could overheat.
No fundamentals
No significant fundamentals are scheduled for today. Traders should turn their attention to the stock market.
USD/JPY falls below SMAs
USD/JPY spent Thursday's morning in between the bounds of the weekly PP and the 100-hour SMA. However, as risk-averse investors started buying the Yen mid-session, the US Dollar fell 100 pips within a couple of hours, thus dashing through the strong support of the 100-, 55– and 200-hour SMAs. This fall was stopped solely by the bottom boundary of a two-week channel near the 108.60 mark.Technical indicators suggest that this period of decline could continue in this session, as well, especially if the current stock volatility persists. In addition, no significant events that could push the rate above all three SMAs at 109.30 are scheduled for today.
In case of strong bearish sentiment, the ultimate low should be the weekly S2 at 107.60, while a more possible target is the bottom channel line near 108.60.
Hourly chart
As apparent on the chart, the rate is still trading in a narrow five-week descending channel. Given the current positioning of the pair, traders might see a soon breakout to the upside that could be followed by a short-term surge.
Daily chart
SWFX traders are on the long side, as 72% of open positions were bullish during the morning hours (-2%). Meanwhile, 64% of pending orders are to sell the Greenback (-2%).
The market sentiment of OANDA traders remains strongly bullish with 69% long positions (+1%). Saxo Bank clients are likewise bullish, as 58% of open positions are long (unchanged from the previous session).
Spreads (avg, pip) / Trading volume / Volatility