- SWFX market sentiment is at equilibrium
- 51% of pending orders in the 100-pip range are to BUY
- Important support is located circa 112.10
- Upcoming events: FOMC Members Dudley and Kaplan to speak, US Building Permits, US Housing Starts
The Labour Department showed that the US import prices grew at the strongest pace of 0.7% in more than a year in September, due to higher costs of food and petroleum.
Meanwhile, underlying inflation marked a modest increase of 0.3% in the reported period. The following report from the Fed showed that the US industrial production gained 0.3% in the prior month amid fading effects of Hurricanes Irma and Harvey, allowing utilities output to bounce back.
Busy day for traders
The US Census Bureau is to release data on Building Permits and Housing Starts for the month of September at 1230GMT.
Meanwhile, the President of the Reserve Bank of New York William Dudley and the President of the Reserve Bank of Dallas Robert Kaplan will participate in a panel discussion ‘Dallas and New York as Centres of Growth' at 1200GMT.
USD/JPY tries to reach 112.60
During previous trading session, the Greenback continued to strengthen against the Yen, fluctuating in two minor ascending channels. At the moment, the turnaround of the rate seems unlikely, as the southern side is reliably secured by a combination of the 55- and 100-hour SMAs in conjunction with the weekly PP at 112.13.In contrast, the closest resistance level except for the 200-hour SMA is located only near the 112.57 and is formed by the weekly R1 and the upper boundary of one of the above patterns.
In larger perspective there is a need to take into account that the pair is approaching the upper boundary of a dominant falling wedge pattern, which means that another rebound most probably is going to happen in the nearest future.
Hourly chart
The 200-hour SMA that halted the rate's fall on Friday was strong enough to initiate a minor period of appreciation in this week. Despite high volatility, the Greenback closed with slight gains on Tuesday, thus remaining in the bounds of the weekly R1 and PP at 112.57 and 112.13, respectively – a range that has maintained in this session, as well.
By and large, the failure to move away from the upper wedge boundary indicates that the US Dollar might be gathering strength to move past its resistance.
Daily chart`
SWFX market sentiment is at equilibrium on Wednesday which has confirmed the gradual weakening of the bearish sentiment. In addition, 52% of pending orders are now to buy the US Dollar (-1%).
Traders at OANDA have turned bullish on the pair, as 52% of open positions are long (+2%). Meanwhile, the number of open positions by Saxo Bank clients is at equilibrium.