- SWFX market sentiment is 54.80% bearish
- 54% of pending orders in 100-pip range are set to sell
- Significant support is located circa at 110.11
- Upcoming Events: US ISM Manufacturing PMI
Stronger-than-expected US pending home did not manage to support the USD/JPY exchange rate. Following the release, the Yen appreciated against the US Dollar by 0.053% to be seen trading at 110.46. The National Association of Realtors reported that the Pending Home Sales Index rose twice as much as anticipated by a seasonally adjusted 1.5% in July, following an upwardly revised 0.7% drop in the prior month. Nevertheless, the strong increase offset previous declines only partially and suggested that existing home sales are likely to increase in the near term, as fewer available properties forced buyers to act immediately. Analysts expect housing sector to continue recovering after being stymied by the lack of homes, which led to higher prices.
The US Dollar did not manage to appreciate against the Japanese Yen at the moment the data on the US advance GDP was released. The pair posted a 0.13% decline to hit the 111.03 mark and then went even slightly lower, though still managed to retreat slightly, with the exchange rate hovering around 111.00 for the day. The US Bureau of Economic Analysis reported on Friday the first release of the country's GDP for the second quarter rose at an annualised pace of 2.6% from the downwardly-revised reading of 1.2% in the prior quarter, in line with economists' projections. Still, despite the generally positive trend, Friday's data is overall unlikely to bolster any major shift in sentiment on the US economic performance.
US Manufacturing PMI in focus
Today at 14:00 GMT the Institute for Supply Management will release information on the US Manufacturing PMI that is expected to cause some volatility in the markets, especially if the actual data will appear to be lower than analysts' forecasts
USD/JPY remains at weekly S1
In the second half of Monday the American Dollar continued to move along the 20-hour SMA and the former triangle's upper resistance line. It did not make a fully-fledged rebound, nor did it not fall below the weekly S1 at 110.11. Generally, the pair is expected to continue to slide today in the southern direction. Firstly, because it experiences pressure from the above 20-hour SMA as well as from the approaching 55-hour SMA near 110.60. Secondly, because of reaction on announcement of information on the US ISM Manufacturing PMI that will be released at 14:00 GMT, provided that actual figures will match with experts' forecasts. However, the possible fall should not go beyond the weekly S2 that is located at the 109.50 level.Hourly chart
Yesterday the currency exchange rate has finally reached the lower support line of a symmetrical triangle. It seems that the pair is ready to make a fully-fledged rebound and start to head towards the weekly PP at 111.15. Hopefully, this attempt will not be undermined by release of the US Manufacturing PMI. However, even if drags the pair down, the fall should be limited by the closest support barrier set up by the weekly S1 at 110.11.
Daily chart
The bearish market sentiment continue to dominate in this session, as the number of open positions is 55% short, compared to 52% on Friday. Meanwhile, 59% of pending orders are to buy the US Dollar.
On the other hand, OANDA clients are bullish on the pair, as 57.70% of all open positions are long. Likewise, similar viewpoint is held by Saxo Bank clients who hold 54% long positions (-2%).