- SWFX market sentiment is 56% bearish
- 58% of pending orders in a 100-pip range are to sell
- Significant support is located at 112.55
- Upcoming events: US Final GDP q/q, US Unemployment Claims, FOMC Member Fischer speaks
The Commerce Department showed that new orders for the US-made capital goods rose more than anticipated 1.7% over the month of August, while shipments continued to increase, suggesting the strengthening of the US economy, despite an expected drag from Hurricanes Irma and Harvey.
Moreover, sign of rising spending on equipment buoyed expectations for the Fed's December rate hike.
US Final GDP for Q2
The main event of Thursday's trading session is the US Final Gross Domestic Product for the second quarter of 2017. This data is released at 1230GMT together with the US weekly Unemployment Claims. In addition, the Federal Reserve Governor Stanley Fischer is set to speak at 1415GMT. Meanwhile, Japan is to publish various sets of data at 2330GMT and 2350GMT, as well as 0500GMT early on Friday.
USD/JPY breaks long term pattern
Unfortunately for the Yen, the buck traders managed to push the pair through a combined resistance formed by the monthly R2 at 112.54 in conjunction with the upper trend-line of a ten month long falling wedge pattern. Despite such significant breakthrough, the exchange rate continues to fluctuate in two recently formed ascending channels whose cross point might represent a breaking point of another minor rising wedge.If this assumption is true, the pair might try to slip to the bottom. However, all these attempts are likely to be neutralized by a combination of the rising 55-, 100- and 200-hour SMAs. To put differently, if the pair has indeed left the long-term pattern, it might freely continue to climb to the top, facing no significant obstacles on its way (at least in the short run).
Hourly chart
Despite being pressured to the upside on Wednesday, USD/JPY nevertheless closed slightly below the upper wedge boundary and the weekly R1 circa 112.80. Meanwhile, the candle was almost flat during the morning session, demonstrating the equal force of both bulls and bears. Thus, the upcoming trading sessions could confirm a possible reversal in the medium term. The upside is guarded by the aforementioned upper wedge boundary, while the nearest support is set by the monthly R2 at 112.55.
Daily chart
The bearish market sentiment has strengthened on Thursday, as the number of traders holding short positions is 56% (+5%). However, 51% of current pending orders are to buy the US Dollar.
The number of open positions held by OANDA clients on Thursday is at equilibrium. Thus, bulls have managed to overcome the bearish sentiment that dominated the market this week. In addition, 53% of Saxo Bank traders are holding long positions on Thursday.