- SWFX market sentiment is 54% bearish
- 54% of pending orders in a 100-pip range are to buy
- Significant resistance is located at 113.37
- Upcoming events: US ISM Manufacturing PMI, Japan's Monetary Base y/y, BOJ Core CPI y/y
The Commerce Department said that the US economic growth in the second quarter was the quickest in more than two years, with a 3.1% annual increase in the reported period.
However, growth momentum is expected to be slowed owing to the impact of Hurricanes Irma and Harvey. Analysts suggested anticipated weakness would be softened by rising inventory investment in the Q3.
ISM Manufacturing PMI
The US Institute of Supply Management is to publish its Purchasing Managers' Index at 1400GMT, among other minor data releases. In addition, Japan is to release various data sets both in this session and early on Tuesday, such as, the monthly Monetary Base at 2350GMT and the BOJ Core CPI and the Consumer Confidence at 0500GMT.
USD/JPY surges towards updated weekly R1 at 113.36
Despite a certain volatility that was caused by a release of information on the US consumer spending, the pair continued to gradually climb to the top, as expected. In the first half of Monday, the rate is likely to cross the upper trend-line of a junior descending channel and continue to head towards the updated weekly R1 at 113.36.Such scenario is supported by the 55-, 100- and 200-hour SMAs as well as the weekly PP, which are all located below the current market price.
The only event that has a chance to push the currency pair in the opposite direction is a release of US ISM Manufacturing PMI at 14:00 GMT. Otherwise, the pair is projected to head to the north, fluctuating in a senior ascending channel.
Hourly chart
Following the slight prevalence of the bullish sentiment on Friday, the US Dollar seems to be continuing its upward movement for the second consecutive session. As a result, the rate is testing the upper boundary of the falling wedge. The trading range on Monday morning remained between the weekly R1 and PP in the 113.37/112.42 area.
Daily chart
The bearish market sentiment has diminished slightly on Monday, as the number of traders holding short positions is at 54%. In addition, 54% of pending orders are to sell the US Dollar (+1%).
OANDA clients are bullish on the pair, with 56% of open positions being long in this session (+3). In addition, 51% of Saxo Bank traders are also holding long positions (-1%).