- Swiss market sentiment is 62% bearish
- 61% of pending orders in the 100-pip range are set to SELL
- No US data releases until Wednesday
On Monday, the US Dollar lost more ground against the Japanese Yen. Moreover, the currency exchange rate broke the lower trend line of the medium scale descending channel pattern.
The Bureau of Labor Statistics released Consumer Price Index data that came in line with expectation of 0.2%. The CPI rate stays unchanged, repeating itself from period to period.
The Capital Economics' senior US economist Michael Pearce said. "Our forecast is that core inflation will continue to trend higher from here, with core PCE inflation hitting 2.3 per cent by the end of this year. With economic growth strong and inflation overshooting, the Fed will continue hiking interest rates once a quarter over the coming 12 months."
No data on Monday
The economic calendar is empty for Monday. However, join other Dukascopy webinars to spend the time productively. For example, the weekly economic calendar review will start on the bank's live webinar platform at 12:00 GMT.
USD/JPY still points to decline
The US Dollar continued to consolidate against the Japanese Yen for the third consecutive session on Friday. The pair, however, did maintain its rather flat tendency downwards, pressured lower by the 55– and 100-hour SMAsOn Monday morning, the Greenback surpassed the weekly and monthly S1s and fell to the 61.80% Fibonacci retracement line located at 110.20 - a new two-month low. The positioning of technical indicators leads to believe that bears could still prevail in this session, thus sending the pair closer to the weekly S3 at 109.40.
If looking at the upside potential, the US Dollar should find strong resistance near 111.00, as the 55– and 100-hour SMAs and the weekly PP are located there, while the ultimate upside target is the breached senior channel and the 200-hour SMA at 111.25.
Hourly Chart
The daily chart has been reviewed. It has been spotted that the rate is trading in a descending channel pattern. Although, note that the pattern's lower trend line is still speculative.
That means that it has not been touched even twice. Instead the pattern has been drawn by properly drawing the upper trend line and setting a parallel line at a previous low level.
Daily chart
Swiss traders no longer are neutral on the pair, as once more bearish traders dominate the market sentiment. Namely, instead of 51% long positions that were observable on Friday, 61% were bearish on Monday morning.
Meanwhile, trader set up pending orders are also bearish, as 55% of orders are set to sell.
Saxo Bank traders are still shorting the USD/JPY, as 55% of set up orders at the brokerage are short. Meanwhile, OANDA traders are 53% long on the pair.
The drastic change in the SWFX sentiment during the last two trading sessions reveals that the retail trader sector must be taking advantage of the intraday movements on the hourly chart.
Spreads (avg, pip) / Trading volume / Volatility