- SWFX market sentiment is 64% bearish (+1%)
- 53% of pending orders in the 100-pip range are to SELL
- Strong resistance near 113.85
- Upcoming events: US Unemployment Claims
The Japanese Yen strengthened against the Greenback on the upbeat Japan Eco Watcher's survey. The USD/JPY fell 26 base points or 0.23% to the 113.57 mark, returning to the levels close to Wednesday lows.
The Cabinet Office revealed on Thursday morning that Japanese Eco Watchers' Index, the measure of peoples' evaluation of the country's economy, climbed to the highest level since March 2014. The Economy Watcher's survey showed that the Current Index climbed to 52.2 points in October, surprising forecasts for a drop to 50.8, while the Outlook Index rose notably to the highest level in 46 months of 54.9 in the same period. The economic growth of Japan was expected to cool down in Q3, though experts suggested any weakening to be transitory.
US Unemployment Claims
The most significant fundamental event of this session is the US Unemployment Claims at 1330GMT. Meanwhile, some minor US and data are to be released today, namely, the Final Wholesale Inventories for September, Natural Gas Storage and 30-y Bond Auction at 1500GMT, 1530GMT and 1801GMT, respectively.
Likewise, Japan is to publish its M2 Money Stock for October at 2350GMT and Tertiary Industry Activity for September early on Friday at 0430GMT.
USD/JPY plunges amid BoJ Summary of Opinions release
A release of the Bank of Japan Summary of Opinions as well as ongoing concerns over delay of the Trump's tax reform implementation continued to push the exchange rate in southern direction.In technical terms, this downward movement is expressed in one-week long descending channel, which consist of three reaction highs and lows. As in early morning the pair made a rebound from an upper trend-line of the pattern, the rest of the day it is expected to spend either in a red zone or in consolidation.
This assumption is supported by the fact that the northern side accumulated all active barriers, such as the 55-, 100- and 200-hour SMAs plus the weekly PP. Moreover, the closest support area is supposedly located only near the 113.40 mark.
Hourly chart
The US Dollar was driven by strong downside risks on Wednesday, thus pushing as low as the 20-day SMA circa 113.40. The given session, however, ended with a close slightly above the weekly PP and within the bounds of the ascending wedge.
A similar situation is apparent today, as well. During the morning, the rate had already pushed back down to the 20-day SMA. It is expected that the pair closes in the red area today.
A possible trading range could be between the weekly PP and the aforementioned 20-day SMA in the 113.83/40 territory.
Daily chart`
SWFX market sentiment has changed by one percentage point on Thursday, as 64% of traders are holding short positions (+1%). Meanwhile, pending orders are at equilibrium.
The bearish market sentiment of OANDA traders has slightly weakened in this session, as 55% of open positions are short (-1%). Meanwhile, the number of open positions of Saxo Bank clients is 51% long (-2%).