- SWFX market sentiment is 69% bullish
- 72% of pending orders in a 100-pip range to buy
- Gains could be capped near 110.49
- Upcoming Events: US ADP Non-Farm Employment Change, US Preliminary GDP q/q, FOMC Member Powell speaks , Japan's Preliminary Industrial Production m/m
The American Dollar continued to advance against the Yen as it was expected yesterday. The reason behind this new direction was mostly associated with anticipation of the Fed Chair Janet Yellen speech that most probably will significantly affect the value of Dollar, at least in the short run.
The report showing an unexpected drop in the US new home sales in July boosted an initial fall in the USD/JPY. The Yen strengthened against the US dollar by 0.08% to reach the 109.39 mark, albeit the pair returned to testing pre-data levels in the Thursday's morning session. The Commerce Department revealed that new home sales in the US fell 9.4% to a seasonally adjusted amount of 571K units in July, which was the strongest decline since December 2016. Weak figures raised concerns over the future recovery and healthy growth of the country's property market. Data would be closely watched to evaluate whether enhanced supply conditions would help reinforce sales conditions in the next couple of months.
Busy day for USD traders
The main fundamental events in this session are the US ADP Non-Farm Employment Change and Preliminary GDP for the previous quarter at 1215GMT and 1230GMT, respectively. In addition, the Federal Reserve Governor Jerome Powell is set to speak at Large-Bank Directors Conference at 1315GMT. Finally, the day will end Japan releasing Preliminary Industrial Production for the month of July at 2350GMT.
USD/JPY jumps to 109.92
Among all major currency pairs, the greatest impact from a release of information on the US CB Consumer Confidence suffered the Yen, which lost 1.13% in value in seven hours. Today the buck is expected to continue the soar at least until it will encounter a combined resistance level set up by the weekly R1 at 109.92 and the senior channel's upper boundary. Given that from the southern side all technical barriers are located below the 109.28 level, a rebound is likely to happen. However, there is also a need to take into account a reaction of traders on release of the two key US macroeconomic data sets today, which are likely to stimulate appreciation of the buck even more. To put differently, if the released data justifies experts expectations, the pair will break out of the channel in the northern direction.Hourly chart
The US Dollar continues to appreciate against the Yen for the third consecutive day. The rate is fluctuating around the weekly R1 at 109.92 and ranging between the 109.60 and 110.20 marks. Given that the nearest barriers are set by the weekly R2 and the weekly PP at 110.49 and 109.28, respectively, there is large potential for the currency pair to navigate either direction.
Daily chart
SWFX market sentiment is bullish on Wednesday, as 69% of traders are holding open positions (+3%). Meanwhile, 51% of pending orders are to sell the US Dollar.
OANDA clients are likewise bullish on the pair, with 64% of its clients having long positions (+1%). Similar viewpoint is held by Saxo Bank clients with 61% long positions (+3%).