- SWFX market sentiment is 58% bullish
- 63% of pending orders in a 100-pip range are to sell
- Nearest resistance is located at 120.07
- Upcoming events: US Building Permits, US Current Account, US Housing Starts, US Import Prices m/m, Japan's Trade Balance
The Commerce Department reported that the US retail sales dropped unexpectedly 0.2% over the month of August, missing expectations for a 0.3% increase.
The negative changes were mainly due to depressed purchases of motor vehicles likely after Hurricane Harvey, which could cause a further moderation in consumer spending in the Q3. However, a rise in purchases at restaurants and furniture outlets suggested the demand is set to be supported by a healthy labour market.
US Building Permits
The economic calendar for September 19 includes various data releases from the Unites States of significant and intermediate importance, namely, the Building Permits, Housing Starts and Import Prices for the month of August at 1230GMT. In addition, the quarterly data on the US Current Account is likewise released at the same time. Meanwhile, Japan's Ministry of Finance is to publish the country's Trade Balance for August at 2350GMT.
USD/JPY approaches upper edge of dominant pattern
The pressure from the 20- and 55-hour SMAs as well as formation of a minor ascending triangle expectedly led to further appreciation of the back against the Yen.Currently, the pair is confidently approaching to the weekly R1, which is located at the 112.07 level. The fact that the rate experiences pressure from the above MAs as well as the fact that the rate is fluctuating in an ascending channel point out on the further surge.
However, after crossing this level there is a high chance that the pair will retreat, as an area between the 112.20 and 112.55 levels represents a location of the monthly R2, the 200-day SMA and, most importantly, the upper edge of a long-term falling wedge. So, from a daily perspective after reaching the 112.55 mark, the Yen is expected to take the lead once again.
Hourly chart
The US Dollar has maintained its momentum north towards the upper channel boundary since last week. The bullish momentum apparent on Monday pushed the pair above the 100-day SMA and the monthly R1 near the 111.20 mark.
Consequently, it is trading between the aforementioned resistance/support cluster and an upside limit set by the weekly R1 and the 200-day SMA circa 112.20.
Daily chart
The bullish market sentiment has strengthened on Tuesday, as 58% of traders are holding open positions (+1%). Meanwhile, 57% of current pending orders are still to sell the US Dollar (unchanged from Monday).
OANDA traders have turned bullish on the pair, with 59% of its clients having long positions. In addition, 53% of Saxo Bank traders are likewise holding long positions (+1%).