- SWFX market sentiment is 56% bullish (+3%)
- 53% of pending orders in the 100-pip are to BUY
- ISM Manufacturing PMI
USD/JPY was testing the weekly R1 early today; in case this level remains intact, the pair is likely should target the 109.40 area.
The Bureau of Economic Analysis released Advance Gross Domestic Product data for Q1 2018, but despite the fact that the data came out better-than-expected of 2.3%, compared to the 2.0% estimate, the EUR/USD currency pair moved upwards after bouncing a little bit lower at the moment of the report.
The move upwards may be caused by the fact that in the previous quarter Advance GDP data was 2.6%, which was about 0.3% higher than in the latest quarter.
FOMC dominates fundamentals
The main fundamental event in this session is the FOMC Monetary Policy Statement and the Federal Funds Rate at 1800GMT. A rate hike is not expected to occur today; so any deviation from this assumption is very likely to cause big fluctuations in the market.
Meanwhile, some other data releases are scheduled during the first part of the day, including the ADP Non-Farm Employment Change published 1215GMT.
USD/JPY returns to medium-term pattern
The general strengthening of the US Dollar against major currencies on Tuesday had a positive impact on the given pair. As a result, the rate managed to strengthen by 0.56%, thus ending the previously-existing four-day period of consolidation.It is still likely that some upside potential is realised in this session towards the medium-term channel and the 61.80% Fibonacci retracement near 110.20. This movement should be guided by the 55– and 100-hour SMA. Further advance is not expected during the first part of today.
Meanwhile, the Fed is to release its Monetary Statement at 1800GMT. Traders expect that a rate hike has to be put on hold this time; thus, a surprise would introduce massive volatility in the market and consequently breach the nearest support and resistance levels.
Hourly Chart
The US Dollar has strengthened notably against the Japanese Yen since mid-March. This movement has guided the pair past the 55- and 100-day SMAs. The latter was breached last week.
Daily technical indicators suggest that the pair should soon mark a bearish reversal, as the US Dollar is approaching the overbought territory. It is possible that the pair still reaches the 200-day SMA and the 38.20% Fibonacci retracement prior to reversing to the downside.
Daily chart
Daily technical indicators suggest that the pair should soon mark a bearish reversal, as the US Dollar is approaching the overbought territory. It is possible that the pair still reaches the 200-day SMA and the 38.20% Fibonacci retracement prior to reversing to the downside.
SWFX traders are increasingly bullish on the US Dollar, as 56% of open positions were long during the morning hours (+3%). Set up orders are likewise bullish with 57% of them being set to buy the Greenback (+6%).
The market sentiment of OANDA traders is strongly bullish with 62% of them holding long positions. In addition, the number of long positions of Saxo bank traders is 60%.