USD/JPY upside risk prevails

Source: Dukascopy Bank SA
  • SWFX market sentiment is 72% bullish
  • Pending orders in the 100-pip range are 62% to BUY
  • ADP Non-Farm Employment Change

The US Dollar ended the Tuesday's trading session with strong bullish momentum against the Japanese Yen.

The Institute for Supply Management revealed the decrease in purchasing managers index of 59.3 in March, compared to 60.8 in the previous period. However, there was a decrease, the data was still positive by being above 50 and caused US dollar to strengthen.

The pair stepped lower just a little bit, which can be explained by the fact that there is still a holiday today and the volume is not as usual, which most probably eliminated more significant fluctuations.

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ADP Non-Farm Employment Change





Today is full of fundamental events. The ADP Non-Farm Employment Change release scheduled at 12:15 GMT which will be covered by the Dukascopy research team in bank live webinar.

Followed by the ISM Non-Manufacturing PMI and Crude Oil Inventories which is scheduled at 14:00 GMT.



USD/JPY gradually moving north in the junior ascending channel

The US Dollar was guided by strong upside momentum on Tuesday. This movement began shortly after the pair hit the 200-hour SMA early in the session and was followed by a breakout of four resistance levels. By Wednesday morning, the Greenback was fluctuating near a down-trend.

It is apparent that the pair is moving steadily towards the medium-term channel and the 23.60% Fibo located at 106.80. Both lines have previously succeeded at reversing the rate near 107.00. This means that the current upward movement might still continue until this psychological level is reached.

In terms of support, the Greenback is unlikely to move below 55– and 100-hour SMAs at 106.35. Today's fundamentals, however, could introduce some changes to this assumption.

Hourly Chart




The daily time-frame has not revealed any substantial development. However, the pair has breached the upped boundary of a channel down.

Daily chart



Market remains bullish

SWFX traders are still on the long side, as 72% of open positions were bullish during the morning hours. Moreover, trader set up orders remain bullish, as 62% 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 67% long positions. In addition, Saxo bank traders are 56% bullish in regards to this pair.


Spreads (avg, pip) / Trading volume / Volatility

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