- Swiss market sentiment is 64% bearish
- 56% of pending orders in the 100-pip range are set to SELL
- No US data releases until Wednesday
On Tuesday the USD/JPY currency exchange rate made an attempt to pass the combined resistance of a dominant descending pattern and the 23.60% Fibonacci retracement level.
The Bureau of Labor Statistics released Consumer Price Index data that came in line with expectation of 0.2%. The CPI rate stays unchanged, repeating itself from period to period.
The Capital Economics' senior US economist Michael Pearce said. "Our forecast is that core inflation will continue to trend higher from here, with core PCE inflation hitting 2.3 per cent by the end of this year. With economic growth strong and inflation overshooting, the Fed will continue hiking interest rates once a quarter over the coming 12 months."
No data on Tuesday
The economic calendar has no releases that might influence the financial markets through the strength of the US Dollar. However, join the Visual JForex webinar and the Butterfly Set Ups webinar, respectively at 11:00 and 13:30 GMT to learn how to trade the macroeconomic data releases.
USD/JPY recovers previous loses
Bulls managed to prevail in the market on Monday and thus send the USD/JPY exchange rate 0.60% higher. Gains above the 110.00 level were stopped by the combined resistance of the 100-hour SMA, the weekly PP and a channel line. By Tuesday morning, the pair had returned for another test of this level.Even though some gains are possible during the following hours, the US Dollar faces a strong cluster formed by the 55-, 100– and 200-period (4H) SMAs at 111.30. It is unlikely that this resistance is surpassed in this session, as the pair is steadily approaching the overbought territory.
In terms of support, the 55-hour SMA should remain intact. If this level is breached, the next target is the weekly and monthly S1s at 110.40.
Hourly Chart
The daily chart has been reviewed. It has been spotted that the rate is trading in a descending channel pattern. Although, note that the pattern's lower trend line is still speculative.
That means that it has not been touched even twice. Instead the pattern has been drawn by properly drawing the upper trend line and setting a parallel line at a previous low level.
Daily chart
Swiss traders remained bearish on the pair on Tuesday, as 64% of open positions were short. Just last week the sentiment was neutral.
Meanwhile, trader set up pending orders are also bearish, as 53% of orders are set to sell. However, on Monday 55% of orders were set to sell.
Saxo Bank traders are still shorting the USD/JPY, as 54% of set up orders at the brokerage are short. Meanwhile, OANDA traders are 56% long on the pair.
The drastic change in the SWFX sentiment during the last trading sessions reveals that the retail trader sector must be taking advantage of the intraday movements on the hourly chart.
Spreads (avg, pip) / Trading volume / Volatility