- SWFX market sentiment is 72% bullish
- 60% of pending orders in the 100-pip range are set to BUY
- Pair reveals ascending pattern
- Empty release session
The US Dollar suddenly decline against the Japanese Yen and broke the previously drawn ascending channel. The reason is simple. Everything is consistent with the massive sell off occurring in the equity markets. The currency exchange rates are set to continue to bounce, as their demand and supply changes as equities are being sold and bought. One can either take advantage of these fluctuations or stay out.
Economic activity in the US services sector was the strongest in more than 12 years, supported by rising new orders, suggesting that the economy sustained the strong momentum in the beginning of the year. The ISM survey showed that its non-manufacturing PMI jumped to 59.9 in January, from 55.9 in the prior month.
The US economy kept expanding even before the stimulus from a $1.5T tax cut program has begun to filter through. However, that is likely to cause some concerns that the country's economy could overheat.
No releases, watch equity markets
There are no data releases scheduled for Tuesday. However, nobody would be watching them even if they were.
The reason for that is the massive sell off occurring in the global stock market. Due to that reason all the big players are involved in that, and there will be no large fluctuations in the currency markets associated with the release of fundamental data.
USD/JPY weak after plunge
The US Dollar remained stable against the Yen on Monday until strong bearish momentum mid-session took over the market. As a result, the pair breached all three SMAs and the up-trend circa 109.00 and consequently plunged 1.04% throughout the day.By Tuesday morning, the Greenback was showing some signs of recovery; however, it does face the previously breached support levels which have become strong resistance.
Thus, it is likely that the pair remains tended southwards today.
The nearest support is set by the bottom line of a five-month descending channel located near the 108.00 mark. In terms of resistance, gains should be capped near 109.60.
Hourly chart
A new development has taken place in regards to analysing the daily chart.
Dukascopy analysts have spotted a long term descending channel pattern, which previously was not marked.
The recent rebound might be the first move in junior ascending pattern in the borders of the just discovered long term channel down pattern.
Daily chart
SWFX traders are on the long side, as 75% of open positions were bullish during the morning hours. Meanwhile, 69% of pending orders are to buy the Greenback.
The market sentiment of OANDA traders remains bullish with 64% long positions. Meanwhile, Saxo Bank clients are likewise bullish, as 54% (-5%) of open positions are long
Spreads (avg, pip) / Trading volume / Volatility