- SWFX market sentiment is 72% bullish
- Pending orders in the 100-pip range are 59% to BUY
- US Preliminary GDP
The recent volatility caused by the Chairman of the Federal Reserve Jerome Powell has caused the review of all currency pairs. The USD/JPY is no exception to the rule. In general, the US Dollar's surge against the Yen has given the opportunity to adjust the long term descending channel.
Durable goods orders report was one of the weakest currency triggers on Tuesday; in fact, it could not compete with the Fed Chair Powell testimony, making the overall sentiment hovering in limbo.
The Commerce Department said that the US durable goods plummeted 3.7% for the month of January. The drop occurred because the demand for transportation equipment tumbled 10.0%, reaching a six-month low, following a 2.6% increase in the prior month.
US Preliminary GDP in focus
It is most likely that there will be still action occurring in the aftermath of the Jerome Powell' speech. However, there is another data set about to be released on Wednesday, which can be swing traded.
Namely, the US Preliminary GDP is scheduled to be published at 13:30 GMT. In regards to macroeconomic data releases this is the mother of all of them. The US Preliminary GDP has proven itself through mathematical tests to be second only to a change in the Federal Funds Rate announcement.
The data release will be covered by the Dukascopy research team on the bank's live webinar platform. The coverage is set to start ten minutes before the release.
To join the webinar one needs to click on the notification that should pop up a minute before the start on all of the bank's trading platforms. On the other hand joining is possible at any time by either googling Dukascopy webinars or finding them in the TV section.
USD/JPY is about to meet support
Due to the fluctuations caused by Jerome Powell's testimony on Tuesday, which broke all previous junior and medium scale patterns, a broader look at the USD/JPY currency exchange rate is done.In general, the pair has revealed a long term channel up pattern in the borders of the long ago spotted dominant descending channel.
In addition, there is another notable pattern. As the pair rebounded against the ascending pattern's support, it formed an up trending pattern.
Meanwhile, on Wednesday the rate was set to meet with a strong support cluster near 107.0, which would propel it to test dominant resistance near 107.80.
Hourly Chart
As there have been more than one adjustment to the long term descending pattern. It can be stated that there might be bias at play from a technical perspective.
Namely, due to the couple of variations of how the pattern can be drawn, there are fluctuations in various descending patterns, depending on who is at play in the market at the time. However, the trend is still downwards aimed in most long term scenarios.
Daily chart
SWFX traders are on the long side, as 72% of open positions were bullish during the morning hours. In addition, 55% of pending orders are to buy the Greenback.
Meanwhile, the market sentiment of OANDA traders remains strongly bullish with 70% long positions. In addition, the Saxo Bank's published market sentiment is 57% long
Spreads (avg, pip) / Trading volume / Volatility