Market News and Research

Market News and Research

USD/JPY breaks short term pattern
Thu, 15 Mar 2018 10:13:46 GMT
Source: Dukascopy Bank SA
  • SWFX market sentiment is 62% bullish
  • Pending orders in the 100-pip range are 52% to SELL
  • Various medium data from the US

The recently discovered channel up pattern has been already broken. The reason was a fundamental one. Namely, the issues regarding the firing of the US Secretary of State and the proposed US import tariffs on the Chinese tech sector have caused a run away from the US Dollar.

The US Census Bureau revealed on Wednesday that US retail sales data did not meet the expectations, instead the gauge fell by 0.1% in March, continuing the slowdown in the first quarter of 2018.

This was the third consecutive month of declines in the US retail sales since April 2012. One of the main reasons for the negative retail sales data is the decrease in household spending on motor vehicles and other big–ticket items.

Watch More: Dukascopy TV

Various US data

The data releases of this busy week continue. As it was previously explained another US macroeconomic data release will occur at 12:30 GMT. The data will be covered by the Dukascopy research team live on the bank's webinar platform.

However, it is almost impossible to make a forecast for this data release, as there will be three sets of data coming out simultaneously. Namely, the Empire State Manufacturing Index, Philly Fed Manufacturing Index and Unemployment Claims are set to be released together.

In addition, Friday will also have a notable data release that the Dukascopy research team will cover on the bank's webinar platform.

USD/JPY breaches SMAs

The USD/JPY exchange rate has been guided by bearish sentiment for the second consecutive session. The pair has fallen 135 pips during this time, thus dashing through various support levels along the way.

By Thursday morning, the pair was located near the 105.75 mark where the weekly S1 and the upper boundary of a three-month channel is located. Technical indicators are located in the strongly bearish area, suggesting that some upward correction should occur soon.

It is likely that the Greenback forms a retracement form the senior channel circa 105.50 and pushes for the weekly PP and the 55– and 100-hour SMAs near 106.40.

In case no fundamental events shake the market in this session, the pair is unlikely to breach this area, thus remaining in the 105.50/106.40 range.

Hourly Chart

The daily chart has not given any additional information during the past week. The reason for that is the fact that the pair has been trading in an almost horizontal pattern after breaking out from the previously active channel down pattern.

In regards to the future, we are still expecting the reveal of a new long term pattern.

Daily chart
Read More: Technical Analysis

Market remains bullish

SWFX traders are still on the long side, as 62% of open positions were bullish during the morning hours. 

However, trader set up orders remain bullish, as 56% of trader set up orders were to buy the US Dollar in favour to the Japanese Yen.

Meanwhile, the market sentiment of OANDA traders remains strongly bullish with 66% long positions. In addition, Saxo bank traders are 55% bullish in regards to this pair.

Spreads (avg, pip) / Trading volume / Volatility

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