- SWFX market sentiment is 55% bullish
- 59% of pending orders in a 100-pip range are to buy
- Significant support is located at 112.07
- Upcoming events: US Unemployment Claims, US Philly Fed Manufacturing Index
The two-day meeting of the Fed resulted in an overall agreement to keep interest rates unchanged at 1.25%, as widely anticipated.
Despite lowered inflation forecasts, the FOMC still forecasted one more rate increase by the end of 2017 to sustain the US economic growth. The Central Bank also noted that it will start unwinding its balance sheet in October, while the market wanted it to wait and see how September's hurricanes affected the economy.
US Unemployment Claims
Apart from some minor data releases during this session, two data sets from the United States scheduled for 1230GMT should be taken into account. The Department of Labour is to publish weekly Unemployment Claims, while the Federal Reserve Bank of Philadelphia is to release its Manufacturing Index.
USD/JPY tests upper boundary of long-term pattern
As with other major currencies, the Fed's decision to reduce the bonds it owns and keep the interest rate unchanged led to sharp appreciation of the Greenback against the Yen.This surge forced the pair to test a combined resistance level formed by the monthly R2 at 112.54 in conjunction with the upper boundary of a long-term falling wedge. From this perspective, the exchange rate is likely to make a rebound and spend the upcoming month moving in the southern direction.
On the other hand, the pair continues to fluctuate in a junior ascending channel whose relevance is supported by the soaring 55-, 100- and 200-hour SMAs.
Hourly chart
The calm movement sideways of the USD/JPY currency pair was disrupted late on Wednesday when the bullish statement of the FOMC pushed the rate for the 200-day SMA near the 112.20 mark. Bulls continue to guide the pair upwards in this session, as well, stranding the Greenback between the 200-day SMA and the monthly R2 in the 112.20/60 range.
Daily chart
The bullish market sentiment has slightly increased on Thursday, as 55% of traders are holding open positions (+1%). Meanwhile, 53% of current pending orders are to sell the US Dollar (-2%).
OANDA traders are bullish on the Greenback, with 58% of its clients having long positions (+7%). In addition, 53% of Saxo Bank traders are likewise holding long positions (unchanged from Wednesday).