- SWFX market sentiment is 57% bearish
- 57% of pending orders in the 100-pip range are to BUY
- Important support is located circa 111.44
- Upcoming events: US Empire State Manufacturing Index, US Federal Budget Balance
The Labour Department showed that the US Consumer Price Index edged 0.5% higher in September, the strongest gain since January, which put the yearly rate of consumer inflation to 2.2% in the reported period.
Separate report showed a 1.6% increase in the country's retail sales, where its sustainable firmness could cause a cease of low inflation trend and confirm the Fed's stance to raise interest rates anytime soon.
Lack of fundamentals on Monday
Only two sets of data that could influence GBP/USD are released on Monday both of which are of medium or low importance. The Federal Reserve Bank of New York is to publish its Empire State Manufacturing Index at 1230GMT. Meanwhile, the release of the US Federal Budget Balance is still tentative.
USD/JPY trades near 111.88
In accordance with expectations, the currency exchange rate continued to move to the south within one-week long descending channel.The further deprecation of the buck was supported not only by the pressure of 55-, 100- and 200-hour SMAs that were moving along the pattern's upper boundary, but also by the increased US CPI and ongoing war of words between the US, North Korea and Iran.
At the moment, the northern side is additionally protected by the updated weekly PP at 112.13, while the southern side lacks of any notable technical barriers up until the weekly S1 at 111.43.
These facts as well as the 56% bearish market sentiment suggests that in the nearest future the currency rate most probably is going to continue to move to the bottom.
Hourly chart
It seems that the US Dollar continues to depreciate against the Japanese yen for the third consecutive session.
On Monday morning, the rate has already managed to push both above and below the 200-day SMA circa 111.80. This long-term moving average is likely to hinder the pair during this session; thus, restricting the Greenback from high leaps either direction.
The next resistance is the weekly PP at 112.12, while the nearest support is set by the weekly S1 at 111.43.
Daily chart`
The bearish market sentiment has remained at the same for four consecutive sessions, as the number of traders holding short positions is still 57%. In addition, 53% of pending orders are to sell the US Dollar (+1%).
OANDA clients are bearish on the US Dollar, as their open positions are 54% short (-3%). In addition, 51% of Saxo Bank traders are currently holding short positions (unchanged from Friday).