USD/JPY plummets on Wednesday

Source: Dukascopy Bank SA
  • SWFX market sentiment was 55% short during the morning hours
  • 72% of pending orders in the 100-pip are to BUY
  • Trade Pattern Ideas webinar at 12:00 GMT

The various support levels of the USD/JPY failed on Wednesday. The currency exchange rate lost most gains gained since May 15 and was set to continue the decline.

The Census Bureau released two data sets simultaneously, where Residential Building Permits for the month of April came out in line with a forecast of 1.35M, moreover, the same number was released in the previous period.

The US Dollar's slight weakening may be affected due to the lower-than-expected Housing Starts data of 1.29M, compared to the forecast of 1.32M.

Watch More: Dukascopy TV


Empty Wednesday for US releases





The whole week has been empty for US data releases, and it will be like that until Friday, when at 12:20 GMT the Dukascopy Analytics will begin the cover of the US Durable Goods release. The data is set to be released at 12:30 GMT. Moreover, the event will occur during the middle of Friday's Analytics webinar that will begin at 12:00 GMT.

However, if you can't wait for Friday, on Thursday the UK Retail Sales will be published at 08:30 GMT. The data release will be covered by the Dukascopy Analytics team on the bank's webinar platform.

In addition, if a trader has the Wednesday's noon free from any other activities, there is something to fill the time with. Join the introduction to Trade Pattern Ideas webinar at 12:00 GMT.



USD/JPY points to bullish reversal

The US Dollar remained steady against the Yen on Tuesday, as it was pressured from both sides by the 100– and 55-hour SMAs. Downside risks prevailed during the Asian session today due to reduced optimism about US-China trade talks. As a result, the pair plunged 36 pips and stopped slightly above the 200-hour SMA near 110.40.

This area is restricted by other important resistance levels, such as the 55-day and 200-period (4H) SMAs, which might hinder bears from making further advances south. Technical indicators are also located in the oversold area.

The upside target should be the combined resistance of the 55– and 100-hour SMAs at 111.00 in case FOMC Meeting Minutes at 1800GMT do not provide additional upside momentum; the ultimate low—110.00 if the 200-hour SMA is breached.

Hourly Chart



By analysing the daily chart, it was conducted that the US Dollar will continue to gain against the Japanese Yen. However, the various support levels near the 110.20-110.35 zone did not hold their ground on Wednesday.

Instead the rate plummeted through the support cluster, and by the middle of Wednesday's trading session had reached the weekly S1 at the 109.63 level.

Daily chart





Swiss traders remain bearish

SWFX traders remain bearish on the USD/JPY pair, as 55% of open positions are short. However, that is clear decline of 5%, compared to Tuesday. It can be deducted from that that the retail traders have already taken profit from smaller shorts.

Meanwhile, trader set up orders are bullish with 57% of them being set to buy the Greenback. Most likely in an effort to close the large amount of short positions, as a short positions take profit or stop loss are buy orders.

The market sentiment of OANDA traders remains strongly bullish with 56% of them holding long positions. In addition, the number of long positions of Saxo bank traders is 54%.


Spreads (avg, pip) / Trading volume / Volatility

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