- SWFX market sentiment is 62% bearish (+8%)
- 58% of pending orders in the 100-pip range are to BUY
- Significant support area is located in 113.00/112.40
- Upcoming events: Japan's lash Manufacturing PMI
The National Association of Realtors reported on Friday that the US existing home sales gained 0.7% to a seasonally adjusted yearly rate of 5.39M in September.
The increase was sustained by dissipation of the effects of Hurricanes Harvey and Irma, though an enduring dearth of available properties kept weighing on overall activity. Moreover, the weak affordability is likely to keep prices high, upsetting considerable buyers' interest throughout the US.
No major events scheduled for Monday
It seems that Monday's trading session is going be rather uneventful due to lack of data releases. The only event that is scheduled for the upcoming 24 hours is Japan's Flash Manufacturing PMI for the month of October published at 0030GMT early on Tuesday. This release, however, is unlikely to affect the market in any way.
USD/JPY surges to 114.00 amid Abe's victory
In accordance with experts' expectations, the Japanese Prime Minister Shinzo Abe and his Liberal Democratic Party secured their seats for another term. Anticipation and confirmation of this result led to sharp appreciation of the Dollar against the Yen, allowing the pair to reach a new cellar at the 114.00 mark.This advance signified a breakthrough through the upper resistance line of large falling wedge. This fact allows assuming that the buck is going to continue strengthening at least until the clash with the monthly R1 at 114.75.
But in shorter perspective the pair is likely to return back to the 113.35 mark and make a rebound from the bottom edge of a junior ascending channel that will be backed up by the rising 55- and 100-hour SMAs.
Hourly chart
The pair's movement during the past week confirmed that it would not return back in the previously-drawn descending wedge. However, the US Dollar has been trading in a medium-term ascending wedge. The weekly R1 is located near the upper wedge of this junior pattern, thus working as a possible upside target for this week.
Conversely, its bottom boundary is guarded by the weekly PP at 112.92. In general, the pair could edge towards the weekly R1 but eventually reverse to the downside.
Daily chart`
SWFX market sentiment remains bearish in this session, as 62% of traders are holding short positions (+8%). In addition, 51% of pending orders is to sell the US Dollar (unchanged from Firday).
Traders at OANDA are likewise bearish on the pair, as 54% of open positions are short (+2%). In addition, the number of short positions by Saxo Bank clients is 52% (unchanged from Friday).