- SWFX market sentiment is 59% bearish
- 58% of pending orders in 100-pip range are set to sell
- 57.85% of all pending orders are to buy the Greenback
- Upcoming Events: US Existing Home Sales
Monthly data on the US Building Permits contributed to the second straight day of gains in the USD/JPY currency pair. Experts anticipated the number of building approvals to rebound to 1.20M in June, expecting an increase in future construction despite higher costs for materials. The report showed that housing sector strengthened as building permits and housing starts advanced more than expected to 1.25M and 1.22M, respectively. It can be noticed on the chart that the USD/JPY exchange rate moved 0.5% higher when the data was released. Strong figures suggested that builders continued to be confident in the US housing industry's ability to keep expanding, while demand for new lots outpaced market supply. The USD/JPY ended Wednesday's session at 111.96.
The US Producer Price Index for final demand nudged up 0.1% in June on the back of sustained increases in services cost that managed to offset plunging energy prices, data released by the Labour Department revealed on Thursday. In 12 months through June, the PPI advanced 2.0%, down 0.4% from May's reading, as the energy-led spike was dropped out of the calculation. Meanwhile, the Core Finished Goods PPI advanced a modest 0.1% over the reported period, missing economists' expectations for a 0.2% uptick and following the 0.3% surge registered in May. Overall, economists suggested that the weaker-than-expected reports are set to diminish expectations for the Fed to raise interest rates for the third time this year, with inflation being the main uncertainty factor to define the course of further monetary policy changes.
Uninteresting day for the buck traders
Today there will be no valuable information released that might affect the price of the Greenback against other major currencies except for information on the US Existing Home Sales that will be announced at 14:00 GMT.
USD/JPY is heading towards weekly S1
After hitting the upper channel line on Thursday, the US Dollar continued its bearish march against the Yen. The American currency fell as low as the 111.10 mark and has not since shows any signs of recovering. However, this sentiment may change in the nearest hours, taking into account that the pair is located in the oversold region. The downside limit may be the weekly S1 at 110.48, while the upper barrier could be formed either by the monthly PP at 110.39 or by an intersection of the 55- and 100-hour SMAs being located in the 111.60/80 territory. Thus, the lines of the senior channel down should be altered slightly in order to adjust to the movements of the price.Hourly chart
At the end of the previous week the pair managed to slip through the monthly PP at 111.38. The main reason behind the 76-pip fall was attributed to combination of the 55-, 100- and 200-hour SMAs. The daily chart shows that the rate continues to headily fall downwards, thereby approaching not only the updated weekly S1 at 110.48, but also the bottom edge of a symmetrical triangle. Since the pattern has not reached a maturity yet, the subsequent rebound is likely to follow.
Daily chart
The bearish market sentiment still dominates in this trading session, even though the number of all short positions slipped to 58%, compared to 63.50% on Wednesday. Moreover, 57.85% of pending orders are to buy the US Dollar.
OANDA clients remain neutrally bullish on the US Dollar, as 53% of all open positions are long. Similar views also hold Saxo Bank clients, whose long positions amounts to 55.50%, compared to 53.20% yesterday.