- SWFX market sentiment is 51% bearish
- 58% of pending orders in a 100-pip range are to sell
- Significant support is located at 112.10
- Upcoming events: US Core Durable Goods Orders m/m, US Durable Goods Orders m/m, US Pending Home Sales m/m, FOMC Member Brainard and BOJ Governor Kuroda to speak
The USD/JPY exchange rate was little changed after the Bank of Japan's interest rate decision announcement. However, the further reaction on the Bank's press conference put the pair to a two-month high of 112.70, where the US Dollar strengthened against the Yen by more than 0.15%. Both events managed to keep USD/JPY above the 112.0 level, though the pair returned to the 111.80 area in the early Friday trading session.
However, the further reaction on the Bank's press conference put the pair to a two-month high of 112.70, where the US Dollar strengthened against the Yen by more than 0.15%. Both events managed to keep USD/JPY above the 112.0 level, though the pair returned to the 111.80 area in the early Friday trading session.
BOJ Governor Kuroda to speak early on Thursday
The economic calendar for this session is packed with data releases from the United States. The country is to publish its Core Durable Goods Orders and Durable Goods Orders for the month of August at 1230GMT. Subsequently, the US National Association of Realtors is set to release Pending Home Sales for the same period at 1400GMT. The session is to end with the Federal Reserve Governor Lael Brainard's speech ‘Labor Market Disparities and the Mission of the Federal Reserve' at a bank lender forum at 1800GMT.
Meanwhile, the Governor of the Bank of Japan Haruhiko Kuroda is set to speak at the National Securities Industry Convention at 0635GMT on Thursday morning.
USD/JPY tests 112.55 mark again
One of the ideas expressed yesterday appeared to be true. The currency pair, indeed, formed a minor descending channel and after forming the second reaction low used the 200-hour SMA as a springboard to break through a combined resistance set up by the weekly PP at 111.90 in conjunction with the 55- and 100- hour SMAs.Despite disappointing Yellen's speech the rate even managed to test the monthly R2 at 112.55. Basically, today the buck has all means to make the sixth attempt to break to the top. But the fact that the northern side is secured by the upper edge of a long-term dominant pattern plus the above monthly R2, this new attempt is expected to fail again.
Hourly chart
The upside momentum guiding the pair today has resulted in a breakout of the upper channel boundary. Consequently, the rate dashed through the monthly R2 and the weekly R1 at 112.81. It is yet to be seen if this upside momentum is sustainable. The base scenario, however, favours the rate returning in the descending wedge this week.
Daily chart
SWFX sentiment is almost at equilibrium on Wednesday, as the number of traders holding short positions is 51% (-5%). In addition, 56% of current pending orders are to sell the US Dollar (-1%).
Meanwhile, OANDA traders are bullish on the Greenback, with 54% of its clients having long positions (+3%). In addition, 52% of Saxo Bank traders are likewise holding long positions on Wednesday (-1%).