- SWFX market sentiment is 57% bullish
- 57% of pending orders in a 100-pip range are to sell
- Significant support is located at 110.70
- Bank Holiday in Japan, minor US releases
The Commerce Department reported that the US retail sales dropped unexpectedly 0.2% over the month of August, missing expectations for a 0.3% increase.
The negative changes were mainly due to depressed purchases of motor vehicles likely after Hurricane Harvey, which could cause a further moderation in consumer spending in the Q3. However, a rise in purchases at restaurants and furniture outlets suggested the demand is set to be supported by a healthy labour market.
Empty economic calendar
Banks in Japan are closed due to Respect-for-the-Aged Day. Meanwhile, some minor data releases from the US are still published in this session, such as the Housing Market Index by the National Association of Home Builders at 1400GMT and Long-Term Purchases by the Treasury International Capital at 2000GMT.
USD/JPY fails to break above 111.26 two times
In line with expectations, until a release of data on the US Retail Sales the currency pair spent in an upward movement. In the process, it made two attempts to break above the monthly R1 at 111.26 but both of them failed. Due to pressure from the approaching 55- and 100-hour SMAs as well as existence of a recently formed ascending channel, the pair is expected to eventually break through that barrier. An aggregate of technical indicators supports this scenario, sending strong buy signals. Nevertheless, a possibility of a third rebound and subsequent dissolution of the channel also remains on the table.Hourly chart
The US Dollar demonstrated strong volatility on Friday, as it ranged in the 109.60/11.40 area for the whole trading session. Bulls, however, prevailed, and they continue to do so in this session, as well. The rate opened at 111.14 - higher than its closing price on Friday – and has since managed to dash through the 100- and 55-day SMAs and the monthly R1.The next resistance set by the weekly R1 at 111.07 is very distant.
Daily chart
Bullish market sentiment has strengthened on Monday, as 57% of traders are holding open positions (+3%). Meanwhile, 57% of current pending orders are still to sell the US Dollar.
OANDA traders are increasingly bearish on the pair, with 61% of its clients having long positions. In addition, 54% of Saxo Bank is holding long positions (+2%).