- Swiss market sentiment is 58% bearish
- 52% of pending orders in the 100-pip range are set to SELL
- Closest notable events only on Wednesday
The resistance to the USD/JPY held its ground on Monday as expected. As a result of the event the rate declined down to the 109.80 mark. On Tuesday, the bounce off from the support level of the medium term pattern was occurring.
The Census Bureau released Retail Sales data that came better-than-expected of 0.5% to forecasted 0.1%. The data represents a good sign for the Greenback, as well as an increase of total value of sales at the retail level.
Michael Feroli, an economist at JPMorgan Chase said: "It gives us comfort that consumers are nowhere near to being as overstretched as they were in the years heading into the Great Recession".
Empty day for fundamentals
Monday's and Tuesday's economic calendars are empty. It is the third week of the month. Due to that reason it is no surprise that there are no data releases scheduled.
Meanwhile, note that on Wednesday there will be rather important data releases occurring. Namely, the Canadian Retail Sales are expected to cause almost 70 pip move on the USD/CAD. Moreover, the US Crude Oil inventories are expected to give the usual half a dollar bounce to one or the other side.
USD/JPY likely to reach 55-hour SMA
The US Dollar depreciated against the Japanese Yen bounced off a junior ascending channel at 109.178 in the midnight of Monday's trading. The whole movement decrease totaled negative 90 pips or 0.81%.However, the US Dollar has recovered itself which may be a bullish signal. The indicators predict the main currency to go upward reaching the 55– hour simple moving average which could be the day's highest resistance level for the trading session. Currently, the pair is located near a support level formed by the monthly S1.
Given that the three SMAs are above the price, the upward momentum is likely to continue during the following trading session. Meanwhile, technical indicators flash neutral signals on the 4H time frame chart. This means that the price movement upward could be insignificant, thus more likely resulting in a move sideways.
Hourly Chart
On Tuesday, Dukascopy Analytics drew the possible borders of a dominant descending channel pattern. However, note that the lower trend line of the pattern has not been confirmed properly.
Meanwhile, it is more important to note that the 100 and 200-day simple moving averages were supporting the currency rate during the recent decline and might have been one of the many reasons, why a surge took place on Tuesday.
Daily chart
On Tuesday, Swiss Foreign Exchange sentiment was 58% short. Previously, 54% of open positions were short.
In the meantime, trader set up orders remain in the neutral zone, as 51% of pending commands are short.
Saxo Bank traders are 57% long on the pair. Meanwhile, OANDA traders are 55% long on the pair.
The drastic fluctuations in the Swiss Foreign Exchange sentiment have ended. The sentiment was bouncing around, as Swiss traders either could not decide what was happening with the pair or took advantage of the short term fluctuations. On Friday, these fluctuations had stopped as almost neutral sentiment set in both in the open positions and the pending orders to sell or buy.
Spreads (avg, pip) / Trading volume / Volatility