- SWFX market sentiment is 54.70% bearish
- 57.75% of pending orders in 100-pip range are set to buy
- Significant resistance is located circa at 111.15
- Upcoming Events: US ISM Non-Manufacturing PMI
Manufacturing growth in the US almost matched growth forecasts, but slightly weaker-than-expected figures failed to support the Greenback significantly. Right after the data were released, the USD/JPY currency pair went to the 110.145 area, or 0.01% higher, but paired gains after that. The Institute for Supply Management stated that its Manufacturing Activity Index came in at 56.3 in July, compared with 57.8 registered in the prior month, though 15 out of 18 industries still indicated expansion. Although production, employment and new orders rose at a slightly weaker pace, they kept pointing to stable economic growth in the US. In addition, experts suggested that some weakness in recent reports is unlikely to affect the normalisation of the Fed's monetary policy.
Stronger-than-expected US pending home did not manage to support the USD/JPY exchange rate. Following the release, the Yen appreciated against the US Dollar by 0.053% to be seen trading at 110.46. The National Association of Realtors reported that the Pending Home Sales Index rose twice as much as anticipated by a seasonally adjusted 1.5% in July, following an upwardly revised 0.7% drop in the prior month. Nevertheless, the strong increase offset previous declines only partially and suggested that existing home sales are likely to increase in the near term, as fewer available properties forced buyers to act immediately. Analysts expect housing sector to continue recovering after being stymied by the lack of homes, which led to higher prices.
US Non-Manufacturing PMI in focus
Today at 14:00 GMT the Institute for Supply Management will release information on the US Non-Manufacturing PMI that is should provide an insight about people's perception of business conditions in country, excluding the manufacturing sector.
USD/JPY fails to bypass 200-hour SMA
Yesterday the currency pair failed to soar towards the weekly PP at 111.15. The reason behind the 53-pips drop, most probably, was attributed to the 200-hour SMA that created an impassable resistance barrier. Nevertheless, from the other side the fall of the rate was also constrained by the 55-hour SMA near 110.43. Since the pair proved to be sensitive to these two technical indicators, they can be temporarily marked as closest support and resistance levels, between which the pair is expected to move during today's trading session. However, given that the upside momentum hasn't come to an end yet, the buck most likely is going to continue to try to move to the top. A necessary impulse might be given by announcement of the US ISM Non-Manufacturing PMI and Factory Orders at 14:00 GMT.Hourly chart
Contrary to expectations, Wednesday trading session the currency pair ended in the downside, which could have been related to disappointing data on the US ADP Non-Farm Employment Change. Nevertheless, the general projection remains the same. Namely, the surge towards the weekly PP at 111.57 and then towards combination of the 55- and 100-day SMAs as well as the weekly R1 and the monthly PP at 111.65.
Daily chart
SWFX traders remain entered into the neutral zone, as 54% of open positions are short, compared to 51% on Wednesday. Meanwhile, almost 59% of pending orders are to buy the US Dollar.
On the other hand, OANDA clients are bullish on the pair, as 58.40% of all open positions are long. Likewise, similar viewpoint is held by Saxo Bank clients who hold 56.60% long positions (+2.3%).