- SWFX market sentiment is 56% bearish
- 55% of pending orders in a 100-pip range are to buy
- Significant support is located at 112.35
- Upcoming events: US Core CPE Price Index m/m, US Personal Spending m/m, Chicago PMI, FOMC Member Harker to speak
The Commerce Department said that the US economic growth in the second quarter was the quickest in more than two years, with a 3.1% annual increase in the reported period.
However, growth momentum is expected to be slowed owing to the impact of Hurricanes Irma and Harvey. Analysts suggested anticipated weakness would be softened by rising inventory investment in the Q3.
US data releases dominate economic calendar
The United States is to release various sets of data mid-session, namely, the US Core CPE Price Index m/m and US Personal Spending m/m, as well as the Chicago PMI and the Revised Consumer Sentiment by the University of Michigan, are to be released at 1230GMT, 1345GMT and 1400GMT, respectively. In addition, the President of the Federal Reserve Bank of Philadelphia Patrick Harker is set to speak about the economic outlook and financial technology at 1500GMT.
USD/JPY rebounds from 100-hour SMA near 112.33
At the present moment, the currency exchange rate is fluctuating in three different channels. After making a rebound from upper edge of two of them, which matched with Governor Kuroda speech, it tried to slip to the bottom. But this attempt was expectedly neutralized by the rising 100-hour SMA. In addition to that, this indicator also helped to keep the rate within the dominant ascending channel.Accordingly, today the pair is expected to gradually move to the top, trying to reach an intersection of the above ascending channel and junior descending channel somewhere near the 112.90 and 113.10 marks. In support of this scenario speaks the fact that the only barrier that the pair is facing on its way is the weekly R1 at 112.81.
Hourly chart
USD/JPY was pushed back into the falling wedge and closed at the 112.35 mark on Thursday. The rate breached the monthly R1, but nevertheless failed to test the 200-day SMA located at 112.07. Thus, the nearest resistance in this session is set by the monthly R2, while the southern direction is supported by the 200-day SMA and the weekly PP circa 112.00.
Daily chart
The bearish market sentiment has remained at the same level on Friday, as the number of traders holding short positions is still 56%. In addition, 53% of pending orders are to sell the US Dollar, compared to 51% to buy on Thursday.
OANDA clients are now bullish on the pair, with 53% of open positions being long in this session. In addition, 52% of Saxo Bank traders are also holding long positions (+1%).