- The Swiss market sentiment is 52% bullish
- 54% of pending orders in the 100-pip range are set to BUY
- Canadian data release webinar at 12:30 GMT
The surge of the USD/JPY rate has continued, as it was expected. However, the volatility of the rate continues to break all short term patterns drawn by Dukascopy Analytics.
The Bureau of Economic Analysis released the US Prelim GDP data that came better-than-expected. Namely, the GDP grew by 4.2%, compared with the forecast 4.0%. The data release showed that the US currency should be more demanded than previously though.
An analyst at Dukascopy Bank SA comments: "There are three types of GDP releases, released a month apart from each other. The most significant version is called the Advance GDP, which is the most significant against other GDP releases. Prelim GDP is an insignificant release, which doesn't affect the market a lot. This time was not an exception."
Canadian data at 12:30 GMT ends the week's notable releases
The week's last notable event will be the publication of the monthly Canadian GDP at 12:30 GMT on Thursday. This data set is set to give the largest reaction from all of the releases, as CAD GDP has been constantly giving a reaction of at least 40 base points each month on the USD/CAD.
USD/JPY breaks dominant pattern
The USD/JPY appreciated 0.36% since Wednesday's trading session, locating at the 111.63 level on Thursday morning. The currency pair broke the speculated resistance of a dominant descending pattern.Moreover, the rate tested the monthly pivot point at 111.77 trying to break through the resistance on Wednesday, but the resistance is too strong to break due to Fibonacci 38.20% side support. On Thursday, the nearest support level was the Fibonacci 50.00%, while the nearest resistance level was the monthly PP at 111.77 level.
Most likely the rate will attempt a push higher as soon as the hourly SMAs and the lower trend line of a junior pattern catch up to the surge.
Hourly Chart
A review of the daily chart of the USD/JPY has been conducted. The rate recently encountered the resistance of a massive descending channel pattern. The event resulted in the recent decline, which has been occurring since the middle of July.
The mentioned decline and the most recent surge during the last few weeks can be charted into a descending channel pattern, which represents a move in the borders of the most dominant pattern. In theory the currency rate should decline due to the resistance line of the pattern, which is supported by the monthly pivot point at 111.80.
However, as many various medium scale, speculative patterns have been broken, there still remains a risk that the momentum provided by the Friday's speech of Jerome Powell could push the USD/JPY even higher. During a continuation of the surge the descending channel could be broken like its predecessors.
Daily chart
The Swiss Foreign Exchange sentiment was almost neutral on Thursday, as 52% long during the morning hours.
In the meantime, trader set up orders were still in the neutral zone. 51% of all orders were set to buy on since Wednesday.
58% of Saxo Bank traders are short today. Meanwhile, OANDA traders are almost neutral, as the brokerage's clients are 52% long.
It can be clearly seen that the global forex market participants are unsure what will be the next move on the charts of the USD/JPY, as the bears and bulls are almost balanced.
Spreads (avg, pip) / Trading volume / Volatility