- SWFX market sentiment is 67% bullish
- 65% of pending orders in a 100-pip range to sell
- Closest support is located at 108.85
- Upcoming Events: US CPI m/m, US Core CPI m/m, FOMC Members Kaplan and Kashkari speak / Bank Holiday in Japan
The report on the US worker productivity, which revealed a higher-than-anticipated increase in the Q2, resulted in a jump of the USD/JPY currency pair. The Greenback appreciated against the Yen by 0.07% to be seen trading above the 109.69 level after data were published.
The Labour Department showed that the nonfarm productivity rose at a 0.9% annual growth pace in the June quarter, above expectations for a 0.7% rise. Experts suggested that an upward move was supported by higher volume of hours worked, but the overall trend was seen weak, raising doubts that the robust US economic growth nearing 3% year-over-year would be achieved even despite Trump's tax cuts, regulatory rollbacks and higher infrastructure spending.
US Consumer Price Index
August 11 is a Bank Holiday for Japan, as it celebrates the Mountain Day. Meanwhile, the US Bureau of Labor Statistics is to release the Consumer Price Index and the Core Consumer Price Index for the month of July at 1230GMT. In addition, two FOMC members are to speak at separate venues. Robert Kaplan, the President of the Federal Reserve Bank of Dallas, is to speak about economic conditions and monetary policy at an educational event in Arlington at 1340GMT, while Neel Kashkari, the President of the Federal Reserve Bank of Minneapolis, will speak at the Independent Community Bankers of Minnesota Annual Convention at 1530GMT.USD/JPY breaks support
Downside risks prevailed on Thursday, thus resulting in a 114-pip plunge in one day. The pair breached the lower boundary of a three-week channel and, consequently, edged below the weekly S2 at 109.33. The given move has formed a more steeper channel down. The downside momentum has allayed, giving room for some upside potential that may be realised in this session. The given assumption that the US Dollar may appreciate against the Yen today is supported by technical oscillators being in the oversold territory and other indicators—at historical lows. Nevertheless, down-trend is still strong. The nearest support formed by the monthly S1 and the weekly S1 at 108.81/82 could be an unbreakable limit, thus guiding the pair towards the upper boundary of the junior channel circa 109.40.Hourly chart
Thursday's strong momentum downwards resulted in the pair breaching the lower boundary of the intermediate-term symmetrical triangle. The US Dollar pushed through the weekly S1 and S2 and closed slightly below the latter. The base scenario favours the pair remaining between the weekly S2 and the monthly S1 in the 109.30/108.80 area. However, better-than-expected US CPI may set the pair for a rally towards the 109.50 mark.
Daily chart
SWFX market sentiment is bullish on Friday, as the number of open positions is 67% long (+12%). This 12% jump demonstrates that traders are increasingly optimistic about the pair being able to reverse its five-day falling streak. Furthermore, 61% of pending orders are to buy the US Dollar.
OANDA clients are likewise bullish on the pair, as 64% of all open positions are long (+1%). Similar viewpoint is held by Saxo Bank clients with 63% long positions (-1%).