- 52% of all pending orders are to buy the US Dollar
- 54% of all open positions are short
- The nearest significant resistance is around 113.36
- Downside potential down to 111.80
- Upcoming events: BOJ Governor Kuroda's speech, Japanese Retail Sales y/y
The mood of American shoppers rose unexpectedly this month, hitting a 16-year high. The Conference Board reported on Tuesday that its Consumer Confidence Index climbed to 118.9 in June, up from the preceding month's 117.6 points, while analysts anticipated a slight dro9p to 116.1 during the reported month. The share of respondents who perceived business conditions as "good" advanced to 30.8% from the prior month's 29.8%, whereas the share of those who perceived business conditions as "bad" dropped to 12.7%, down from May's 13.9%. Furthermore, 32.8% of respondents said that jobs were "plentiful", compared to the previous month's 30%.
Meanwhile, 18% said that jobs were "hard to get", down from the previous month's 18.3%. As to the short-term outlook, the share of those expecting to improve over the next six months fell to 20.4% from 21.5%. Nevertheless, the share of respondents expecting future business conditions to worsen declined to 9.9% in June from 10.3%. Tuesday's data suggested that household consumption growth would likely accelerate in the upcoming months.
ECB Forum in focus
The Bank of Japan's Governor Kuroda is set to participate in a panel discussion at the European Central Bank Forum at 1330 GMT. In addition, the Japanese Yen may likewise be shaken by yearly data on retail sales scheduled for 2350 GMT.
USD/JPY might see further upside potential
Contrary to expectations, USD/JPY was driven by moderate upside momentum that lead to the US Dollar for an appreciation up to 112.40 against the Yen on Tuesday. Subsequently, the pair returned near the 20-hour SMA circa 112.10. By and large, technical indicators suggest further upside potential until the 113.00 mark where an intermediate down-trend on the daily chart is located. In case of strong upside momentum, the rate may likewise test the monthly R1 at 113.36. On the contrary, political uncertainty in the US may weight heavily on the Greenback, thus pushing it down to a support cluster formed by the monthly PP and the 55-hour SMA near 111.80.Hourly chart
USD/JPY has approached an intermediate down-trend near the 113.00 mark that may pressure the US Dollar to the downside. This level, however, might not be reached today if the market lacks strong upside movers. Meanwhile, the rate is supported by the 100-day SMA and the monthly PP at 111.80. Taking into account intraday technical signals, it is likely that this range persists in this trading session.
Daily chart
SWFX market sentiment has turned bearish in this session, as 54% of all open positions are short, compared to 54% on Tuesday. Meanwhile, 52% of pending orders are still to buy the Greenback.
OANDA clients have decreased slightly their bullish sentiment, as 59% of open positions are long (62% on Tuesday). Additionally, Saxo Bank remains bullish on the pair, with 52% of all positions being long (55% on Monday).
Spreads (avg, pip) / Trading volume / Volatility
Traders remain bullish on US Dollar
Traders expect that the US Dollar may appreciate up to the 113.25 mark against the Yen in three months' time. 61% of all forecasts fall above the current spot price which is located near the 111.95 mark. The majority of voters expect the US Dollar to cost somewhere between 114.00 and 115.50 yen in three months, with 18% of survey participants choosing this trading range. Furthermore, the 108.00-109.50 and the >118.50 were the second most popular intervals with 15% of the votes.