- SWFX market sentiment is 54% bearish (-1%)
- 64% of pending orders in the 100-pip range are to BUY
- Important support is located circa 112.40
- Upcoming events: US Existing Home Sales, Fed Chair Yellen to speak
The US Commerce Department revealed that building permits fell to 1.13M in the month of September, adding to concerns that the recovery of the property market was stalling.
Meanwhile, homebuilding in the US dropped to the weakest level in a year in reported period, as Hurricanes Irma and Harvey caused the disruption of single-family homes construction in the South, which could drag the country's GDP growth in the September quarter.
Fed Chair Yellen due to deliver speech
The last day of this trading week will start the US Existing Home Sales for September published by the National Association of Realtors at 1400GMT. However, the main event of this session is the Federal Reserve Chair Janet Yellen's speech ‘Monetary Policy Since the Financial Crisis' at 2330GMT; audience questions are expected.
USD/JPY tests resistance at 113.21
After an active appreciation of buck, bears tried to restore lost positions and return the pair back to the weekly PP at 112.13. However, this attempt did not succeed due to combined support set up by the 100- and 200-hour SMA.In the first hour of this trading session the currency rate jumped by 48 point and began testing resistance between the 113.21 and 113.27 levels. The fact that there is strong confidence that Shinzo Abe and his Liberal Democratic Party will manage to save their seats in the upcoming Japanese general elections suggests that the rate might continue to climb to the top.
On the other hand, the fact that on daily chart the pair has reached the upper boundary of a long-term pattern points out on an upcoming rebound.
Hourly chart
USD/JPY has changed its bearish sentiment that dominated the market on Thursday, thus once again moving closer to the weekly R2 at 113.27. Daily technical indicators suggest that a momentum upwards is still possible during the upcoming trading days; however, it should not be long before the rate starts a wave down.
The upside target of the US Dollar could be the weekly R3 or, in a less likely scenario, the monthly R1 at 113.71 and 114.75, respectively.
Daily chart`
SWFX market sentiment remains bearish on Friday, as 54% of traders are holding short positions (-1%). In addition, 51% of pending orders is to sell the US Dollar.
Traders at OANDA are bearish on the pair, as 52% of open positions are short (+1%). In addition, the number of short positions by Saxo Bank clients is also 52% (unchanged from Thursday).