- SWFX market sentiment is 59% bearish
- 54% of pending orders in the 100-pip range are to SELL
- Bank of England is in focus for macro traders
As it was expected previously, the USD/JPY currency rate did retreat and trade sideways after the massive surge that occurred during the last two trading sessions.Meanwhile, on Thursday morning it was unclear what will be the future short term direction of the currency exchange rate.
The Census Bureau released the monthly Durable Goods Orders that came out lower-than-expected of 1.0% compare with forecasted 3.0%, but better than previous period.
"A senior investment manager Patrick O'Donnell, from Aberdeen Standard Investments, said: "It looks like the European side is trying to acquiesce to Trump's demands. They've got more to lose if tariffs look to be placed on autos, for example. So over multi-month horizon, we'll probably see lower tariffs globally".
Only Bank of England on the calendar
After a very busy Wednesday some macroeconomic data release traders are set to take a day off. However, there is still one notable event set to occur on Thursday.
Namely, the Bank of England is set to make a rate announcement. Moreover, the market forecast created by Bloomberg and shown on all economic calendars, reveals that the bank is set to hike their interest rates. In theory that is set to cause a jump in the value of the GBP against all other currencies.
USD/JPY retraces as expected
Dukascopy Analytics already wrote in the Trading Idea published on Wednesday that the USD/JPY currency exchange rate, after massively surging on Tuesday and Wednesday, was set to decline or trade sideways.On Thursday morning it was clear that both had occurred. The rate declined and began to trade sideways.
In regards to the future, it can be observed that a medium scale, rather long term ascending pattern is set to reveal itself in the future. Meanwhile, in the near term future, the direction is unclear, as the rate is squeezed in between levels of significance.
Hourly Chart
In regards to the daily chart, previously, the currency exchange rate was set to face strong resistance levels each 50 base points. Namely, resistance at the 111.50 mark. Afterwards a resistance at 112.00, and above that level next resistance will be near 112.50.
On Wednesday, the first level was already passed. Next target was the 112.00 mark, which managed to hold ground.
Daily chart
SWFX traders are SHORT on the USD/JPY pair, as 59% of open positions were bearish during the morning hours. Meanwhile, Swiss trader set up orders remained almost neutral, as 51% of all set up orders are to buy the US Dollar in favour to the Japanese Yen.
Due to the fact that the open position bullish proportion on Wednesday had decreased by 4%, it can be assumed that retail traders of Dukascopy took profit from the surge. Although, a dominant proportion of retail traders still remain long.
Meanwhile, OANDA traders have decreased their bullish outlook just like the Swiss traders. Only a day after the surge actually ended. Namely, 55% of open positions were long on Thursday, compared to the 57% on Wednesday.
However, Saxo bank traders are still bearish, as 51% of open positions were short at the brokerage. Previously, 53% of open positions were bearish.
Spreads (avg, pip) / Trading volume / Volatility