- SWFX market sentiment is 55% bearish (-5%)
- 65% of pending orders in the 100-pip range are to BUY
- Important support is located circa 112.40
- Upcoming events: US Unemployment Claims, US Philly Fed Manufacturing Index
The US Commerce Department revealed that building permits fell to 1.13M in the month of September, adding to concerns that the recovery of the property market was stalling.
Meanwhile, homebuilding in the US dropped to the weakest level in a year in reported period, as Hurricanes Irma and Harvey caused the disruption of single-family homes construction in the South, which could drag the country's GDP growth in the September quarter.
US Unemployment Claims
Two sets of fundamentals are scheduled for this trading session, as the Unites States is to release weekly Unemployment Claims and the Philadelphia Fed business Outlook Survey at 1230GMT.
USD/JPY rushes to top
In result of the previous trading session, the Dollar appreciated against the Yen by 0.82%. In result of such advance the pair has practically returned to the 113.20 level, which represented a significant resistance barrier three weeks ago. As this area is additionally protected by the weekly R2, it seems that the currency rate is going to make a rebound.This assumption is also supported by the fact that in result of the sharp surge the pair formed a short-term rising wedge. Accordingly, it is expected to make a breakout in the southern direction.
Finally, there is a need to take into account that the pair is about to reach the upper trend-line of a long-term on the daily chart, dominant pattern, which additionally points out on an upcoming rebound.
Hourly chart
During the past weeks, the rate was hesitating near the upper boundary of a long-term falling wedge. It was expected that the rate could bounce off this line and initiate a new wave down.
Upside risks that prevailed the market yesterday pressured the rate past this boundary and towards the psychological resistance of 113.00. The rate managed to push higher early on Thursday.
However, it is unlikely that the weekly R2 at 113.27 is surpassed; thus, the rate is likely to remain between the weekly R2 and R1 today.
Daily chart`
SWFX market sentiment has once again turned bearish on Thursday, as 55% of traders are holding short positions (+5%). Meanwhile, 51% of pending orders are to buy the US Dollar (-1%).
Traders at OANDA are bearish on the pair, as 51% of open positions are short. In addition, the number of open positions by Saxo Bank clients is 52% short.