- SWFX market sentiment is 61% bearish (+2%)
- 52% of pending orders in the 100-pip range are to SELL the Greenback
- Notable support around 112.90
- Upcoming events: FOMC Members Bostic and Williams to speak, US Consumer Credit m/m
The Greenback feel sharply against the Japanese Yen on the disappointing labour market data. . The USD/JPY currency pair dropped 23 base points or 0.20% to the 113.07 level.
The US employment growth weakened significantly in December due to a decrease in retail jobs, while a surge in monthly pay gains indicated the labour market strength, which could enable the Federal Reserve to hike interest rates in Spring. The Labour Department stated that the non-farm payrolls increased 148K in the reported month, following an upwardly revised 252K in November. Job growth is anticipated to moderate as the labour market remains close to full employment, though with some chances to get a boost from $1.5T tax cuts package.
Uneventful day
Monday's trading session is considered uneventful. The President of the Federal Reserve Bank of Atlanta Raphael Bostic is due to speak about the US economic outlook and monetary policy at the Rotary Club of Atlanta, while his counterpart in San Francisco John Williams will participate in a panel discussion about whether the Federal Reserve should revise their 2% inflation target. The given speeches are scheduled for 1740GMT and 1835GMT, respectively.
In addition, the Federal Reserve is to release monthly data on consumer credit at 2000GMT. This event is unlikely to affect the market in any way.
USD/JPY tries to break from triangle
Despite release of mostly negative employment data on Friday, the currency exchange rate managed to break through 50% Fibonacci retracement level located at 113.00 and the upper-boundary of one-month long symmetrical triangle. As the pair has crossed already most of the technical indicators, the surge is expected to continue.On the other hand, in order to continue moving towards the weekly R1, the rate needs to break through the upper trend-line of a larger symmetrical triangle. In smaller perspective this pattern might halt the soar of the buck.
However, in monthly perspective, it is still expected to continue heading upwards, thus trying to reach the boundary of a one-year long dominant descending channel.
Hourly chart
The three-day appreciation of USD/JPY apparent last week seems to be allayed, as the market was rather indecisive during the first half of Monday.
Given that the southern side is supported by the 55-day SMA (together with other hourly support lines), the Greenback might be reluctant to breach this area and therefore push north, thus ending the day with slight gains. The nearest resistance is the weekly R1 at 113.58.
Daily chart
The bearish SWFX market sentiment has strengthened today with 61% short positions (+2%). Meanwhile, 57% of pending orders are to buy the Greenback (-2%).
OANDA traders are bullish on the pair, as they are holding 54% long positions (-3%). The market sentiment of Saxo Bank stands at equilibrium for the second consecutive session.