- SWFX market sentiment is neutral
- 51% of pending orders in the 100-pip are set to buy
- Empty calendar for US macroeconomic data traders
The surge of the USD/JPY has ended. However, by analysing the sentiment data sets one can see that most retail traders took profits from the surge.
The Bureau of Economic Analysis released quarterly Gross Domestic Product data that came out lower-than-expected of 2.0%, and was also lower than the previous period.
According to Mario Blascak, the European Chief Analyst: "The largest positive contributions to GDP stem from nonresidential fixed investment, personal consumption expenditures, and exports. The biggest drag in PCE, exports, state and local government spending, federal government spending and a downturn in residential fixed investment. "
Empty calendar for US Dollar macroeconomics
On Monday there was minor data release, which did not affect the financial markets after all. Namely, the ISM Manufacturing PMI was released at 14:00 GMT.
Besides that data release, the economic calendars are empty in regards to the US Dollar until Thursday. On Thursday, the ISM Non-Manufacturing PMI and the ADP Non-Farm Employment Change might influence the USD/JPY through the strength of the US Dollar.
ADP data will be out at 12:15 GMT. ISM data will be published at 14:00 GMT. Both data releases will be covered by Dukascopy Analytics on the bank's live webinar. They will begin 10 minutes before the data is released, respectively, 12:05 GMT and 13:50 GMT.
USD/JPY stops the surge
The US Dollar has stopped the surge against the Japanese Yen. Moreover, the long running, rather narrow range ascending channel pattern has been broken.However, to most market participants it was clear that a passing of the lower trend line of the pattern and the 55– hour SMA can be used as a level for setting up orders. So most likely most retail traders got out on time.
Meanwhile, note that the breaking of the pattern occurred in a descending channel pattern, which is likely a part of a larger pattern. That means that a new medium scale pattern is about to be revealed.
Hourly Chart
The daily chart provides additional information. Namely, it was the support line of the previously pierced ascending long term pattern, which stopped the decline experienced on Wednesday.
However, the close by location of various support levels just below the lower trend line of the ascending pattern might have strengthened the trend line.
Daily chart
Already on Tuesday, as there was a slight decline of the USD/JPY rate some Swiss traders took profits. Namely, 51% of open positions were long, compared to the previous 54%. However, on Wednesday the even insignificant domination of the bullish traders was gone, as the retail trader sentiment was neutral.
Meanwhile, the pending orders after being neutral on Tuesday, were slightly bearish, as 51% of them were set to sell on Wednesday.
It can be clearly observed that the dominant part of retail traders closed their long positions already on Monday. Meanwhile, some already were expecting a rebound to take place in the near future.
OANDA traders have become also neutral. Previously, they were bullish with 55% of open positions going long on the USD/JPY.
Meanwhile, Saxo Bank traders are still neutral, as 50% of open Saxo positions are long.
Spreads (avg, pip) / Trading volume / Volatility