- 50% of all pending orders are to buy the US Dollar
- 58% of all open positions are short
- The nearest significant resistance is around 112.20
- Downside potential down to 111.70
- Upcoming Events: US Core PCE Price Index; US Personal Spending; US Chicago PMI; US Revised UoM Consumer Sentiment, Japanese Final Manufacturing PMI, Japanese Consumer Confidence
The US economy expanded at a stronger-than-initially-expected pace in the March quarter amid higher consumer spending. The Commerce Department reported on Thursday that the domestic economy grew at an annualised pace of 1.4% in the Q1 of 2017, following the preceding quarter's expansion of 2.1% and surpassing the prior estimate of 1.2% growth. Thursday's data showed that the Q1 growth figure's revision was driven by stronger consumer spending, which climbed 1.1% during the reported period, compared to the preliminary reading of a 0.6% increase. However, that was the weakest reading since the Q2 of 2013.
Despite the GDP upward revision, the Trump administration's plan to lift annual US economic growth to 3% remained challenging. As to the June quarter, weak retail sales figures, sluggish manufacturing production growth and low inflation suggested that the economy failed to regain positive momentum in the Q2. Other data released on Thursday showed that the number of Americans filing for jobless aid rose 2K to 244K in the week ended June 23, whereas analysts anticipated a fall to 241K.
Minor US data releases in this session
The economic calendar is full of minor data releases from the United States, such as Core PCE Price Index and Personal Spending at 1230 GMT; Chicago PMI at 1345 GMT and Revised UoM Consumer Sentiment at 1400 GMT. Furthermore, Japan is set to publish Final Manufacturing PMI on Monday morning at 0030 and 0500 GMT, accordingly. These data, however, are not considered to be immense market shakers.
USD/JPY enters consolidation
Following the massive plunge mid-Thursday, USD/JPY entered in a minor consolidation phase, thus being stranded between the 55– and 200-hour SMAs at 111.69 and 112.21, respectively. The pair found support at the monthly PP at 111.80 prior to moving north. An immediate resistance is provided by the aforementioned 55-hour SMA, while the next resistance located at the 113.36 mark is a distant target. Technical indicators demonstrate mixed results; thus the possible direction of the US Dollar is unclear. In case bullish sentiment prevails in this session, the rate may approach the 55-hour SMA and may even breach it. Nevertheless, the base scenario favours the rate continuing to move sideways, remaining in the 111.70/112.20 territory.Hourly chart
USD/JPY has approached the upper boundary of an intermediate down-trend. The US Dollar was unable to reach this level on Thursday; thus, a test may happen today or next week. The nearest support is formed by the monthly PP and the 100-hour SMA near the 111.80 mark. In case bearish sentiment prevails, the pair may likewise test the 55- and 200-hour SMAs circa 111.15.
Daily chart
SWFX market sentiment remains bearish in this session, as 58% of all open positions are short, compared to 65% on Thursday. Meanwhile, 50% of pending orders are still to buy the Greenback.
Traders at OANDA clients are bullish on the US Dollar, as 56% of open positions are long. Meanwhile, Saxo Bank clients remain neutral.
Spreads (avg, pip) / Trading volume / Volatility
Traders remain bullish on US Dollar
Traders expect that the US Dollar may appreciate up to the 113.63 mark against the Yen in three months' time. 66% of all forecasts fall above the current spot price which is located near the 112.02 mark. The majority of voters expect the US Dollar to cost somewhere between 114.00 and 115.50 yen in early September, with 22% of survey participants choosing this trading range.