- SWFX market sentiment is 51% bearish
- 57% of pending orders in the 100-pip range are to BUY
- Important resistance is located circa 112.40
- Upcoming events: FOMC Member Harker to speak, US Import Prices m/m, US Capacity Utilisation Rate, US industrial Production m/m
The Labour Department showed that the US Consumer Price Index edged 0.5% higher in September, the strongest gain since January, which put the yearly rate of consumer inflation to 2.2% in the reported period.
Separate report showed a 1.6% increase in the country's retail sales, where its sustainable firmness could cause a cease of low inflation trend and confirm the Fed's stance to raise interest rates anytime soon.
Busy day for traders
Tuesday's session will start with the United States releasing its Import Prices, Capacity Utilization Rate and Industrial Production for the month of September at 1230GMT and 1315GMT. The President of the Federal Reserve Bank of Philadelphia Patrick Harker is to deliver a speech titled ‘The Role of Transportation in Fostering Inclusive Regional Economic Growth' at 1700GMT.
USD/JPY advances by 47 points
The Dollar edged higher against the Yen, as American officials confirmed their willingness to solve North Korean crisis through diplomatic means. The 47-pip surge pushed the pair out of a descending channel but then it stuck near the 112.14 mark that presented disposition of the 100-hour SMA and the weekly PP.A favourable informational background might strengthen the buck even more. Such scenario seems especially probable amid suspicion of existence of a new minor ascending channel. However, there is a need to take into account that the road upstairs is reliably secured by the 200-hour SMA.
In the short run, this barrier is expected to force the pair to back down. But in larger perspective, as long as market sentiment will remain predominantly bullish, it has a chance to break to the top.
Hourly chart
Bulls prevailed on Monday, thus pushing the Greenback up to the 112.20 mark. The pair opened slightly above the weekly PP at 112.13 and has already managed to push both directions.
In general, the pair is trading between the 20- and 200-hour SMAs. This range should hold the rate until early on Wednesday.
Daily chart`
The bearish market sentiment has finally weakened after three days of staying at the same level. Thus, the number of traders holding short positions is currently 51% - a sign that bulls are starting to take the upper hand. In addition, 53% of pending orders are now to buy the US Dollar.
The number of open positions of OANDA clients is at equilibrium, thus gaining some momentum from 54% traders having short positions on Monday. Meanwhile, 51% of Saxo Bank traders are short on the Pound (unchanged from Monday).