- SWFX market sentiment is 71% bullish (-2%)
- 57% (+4%) of pending orders in the 100-pip range are set to BUY
- Upcoming events: US PPI
The USD/JPY currency pair continues to fall. There are two main reasons for that. First is the strength of the JPY seen due to the upcoming changes in the regulation of retail FX trading. Secondly, the US Dollar has been showing weakness during the previous 24 hours against the rest of the financial markets.
The release showed that the US Consumer Price Index surged 0.5% over the course of January, beating forecasts for only a 0.3% rise. Projections for further price pressure strengthened as well as the Fed is largely expected to raise interest rates again in December.
The separate report showed that retail sales in the United States marked an unexpected decline of 0.3%, following a downwardly revised December's figure.
US PPI might cause fluctuations
On Thursday there is one notable data release to watch out for. Namely, the US PPI is set to be published at 13:30 GMT. However, the reaction is almost impossible to forecast, as it is set to be released together with a bunch of various other data sets.
The release is set to be covered by the Dukascopy Research team on the bank's live webinar platform. Tune in by clicking on the notification on the Dukascopy trading platforms. Or one can just google the Dukascopy webinars.
USD/JPY hits new low
Despite a brief attempt to appreciate against the Japanese Yen on Wednesday morning, the Greenback continued to be driven by downside risks for the second consecutive session. By Thursday morning, this bearish momentum had resulted in the pair reaching a new 2016/2017 low of 106.50.If looking at the chart, some southern potential down to the 106.00 mark is still apparent—a level where the bottom boundaries of two prevailing descending channels are located.
In terms of pivot points, the nearest support is provided by the weekly S3 at 105.56.
Following such a steep two-day decline, the US Dollar should start recovering in the nearest time. Even if the bearish sentiment prevails today, the expected advance is expected to happen on Friday.
Hourly Chart
There is an important development, which has occurred on the daily chart of the USD/JPY currency pair. Namely, the currency pair has broken past the dominant and strong support cluster, which was located just below the 108.00 mark.
The previously mentioned increase of Yen's fundamental strength and the resumption of the US Dollar's decline have pushed the rate below the technical levels. Due to that reason expect a full review of the large scale charts in the near future.
Daily chart
SWFX traders are on the long side, as 71% of open positions were bullish during the morning hours (-2%). In addition, 67% of pending orders are to buy the Greenback.
The market sentiment of OANDA traders remains strongly bullish with 69% long positions (+2%). Saxo Bank clients are likewise bullish, as 54% of open positions are long (+2%).
Spreads (avg, pip) / Trading volume / Volatility