- SWFX market sentiment is 60% bearish (+3%)
- Pending orders in the 100-pip range are at equilibrium
- Strong support is located near the 112.45 mark
- Upcoming events: US Factory Orders m/m, BOJ Core CPI y/y
The Greenback made the last attempt to rise against the Yen before falling sharply on non-negative US economic data. The USD/JPY added 5 base points, ahead of the sharp fall to the 111.74 area. However, bulls put the pair back to the pre-data level of 112.60. 112.0 area.
US consumer inflation growth weakened in October, as the hurricane-related increase in purchases of motor vehicles started to fade. The Fed's closely watched inflation measure, the Core PCE Price Index excluding energy and food increased 1.4% year-over-year in October, though the figure undershot the bank's 2% target for more than 5 years. Recent economic data strengthened projections for the Fed to raise borrowing costs once again in December.
Minor fundamentals
This trading session includes only two sets of fundamentals that might affect USD/JPY during the following 24 hours. The first one is the US Factory Orders for November to be released at 1500GMT.
In addition, the Bank of Japan will publish the country's CPI for the same period at 0500GMT early on Tuesday.
USD/JPY falls from rising wedge by 1.22%
An announcement made by General Flynn that led to rapid sell-off of the buck against all major currencies perfectly matched with a breaking point of a readjusted rising wedge formation.Fortunately, bulls managed to create support near the 111.80 mark that was surrounded by the 100- and 200-hour SMAs as well as the bottom boundary of an ascending channel. As this event occurred shortly before markets got closed, new trading session the pair started straight from the pre-fall 112.80 level.
Accordingly, the pair has once again returned back into boundaries of the above rising wedge pattern. Since further path to the top is obstructed by the 50% Fibonacci retracement level at 113.00 and the weekly R1 at 113.11, the pair might actually make another turnaround. If a rebound happens, it might confirm validity of a new junior channel down.
Hourly chart
The passed US tax bill resulted in the pair opening 27 pips below its closing price on Friday. As a result, the US Dollar started this trading session above the 55-day SMA and the weekly PP circa 112.75.
The bullish sentiment was dominating the market early today, as the pair tried to approach the weekly R1 at 113.11. In case this level is breached, it is likely that the pair remains near this mark until the closing time.
Daily chart
The bearish SWFX sentiment has increased by three percentage points this Monday, as 60% of open positions are short (+3%). Meanwhile, 56% of pending orders are to buy the Greenback (unchanged from Friday).
OANDA traders are bullish on the pair, with 54% of open positions being long (-6%). In addition, the number of open positions of Saxo Bank clients is 51% long (-1%).