- SWFX market sentiment was 52% bullish on Thursday
- 56% of pending orders in the 100-pip are set to BUY
- US Retail Sales in the shadow of the European Central Bank
The resistance cluster near the 110.75 mark had managed to holds its ground and force the currency exchange rate into a retreat. However, it was once more set to meet with the ascending channel pattern's lower trend line, which was set to push there ate once more higher.
The Bureau of Labor Statistics released Consumer Price Index data that came out in line with a forecast of 0.2%, staying unchanged from the previous period.
"The slow but steady upward pressure on inflation could tilt a majority of policymakers to lift their suggested interest rate forecast," said Sal Guatieri, a senior economist at BMO Capital Markets.
US Retail Sales in the shadow of the ECB
Thursday is set to be a busy day for macroeconomic data release traders. The main reason for that is the fact that a central bank rate announcement is set to occur during the day, and the following press conference will occur just as a US data release takes place.
Namely, at 12:30 GMT the US Retail Sales and Core Retail Sales data sets are scheduled to be published and covered by the Dukascopy Analytics team. However, at the same time the press conference, that follows the announcement of the European Central Bank's main refinancing rate, will start.
Meanwhile, note that the rate announcement will also be covered by the Analytics team. The coverage will begin at 11:35 GMT on the bank's live webinar platform.
USD/JPY faces strong support barrier
Following a test of the weekly R1 and the monthly R1 at 110.75 mid-Wednesday, the USD/JPY began a new wave down. This bearish momentum has sent the pair as low as the 100– and 200-hour SMAs this morning.It is likely that the pair still edges lower during the following hours prior to reversing somewhere near the 109.70 area. The 200– and 100-period (4H) SMAs and a channel line are also located nearby. It seems that yesterday's fall was only a slight correction against the general up-trend.
Thus, it is expected that the prevailing three-week ascending channel continues to be respected. The daily high today should be the aforementioned 110.75 territory, while a decline should not exceed the monthly PP at 109.45.
Hourly Chart
If one looks at the daily chart, there are no surprises. The currency exchange rate clearly bounced off the support of an ascending channel pattern.
The rate is set to slowly but steadily go higher until it eventually reaches the most dominant patterns resistance line near the 111.50 mark.
Daily chart
Swiss Foreign Exchange market sentiment are 52% long. On Monday, Swiss traders were neutral in regards to the pair.
Meanwhile, for four consecutive trading session 51% of orders were set to buy. On Thursday that changed, as 54% of set up orders were to buy.
This indicates that the retail traders of Dukascopy are taking advantage of this decline just as they profited from the recent surge. The increase of buy orders most likely is the increase of buy to close short position orders that will get triggered, as the rate approaches the support line of the ascending channel pattern.
Oanda traders have decreased their long position proportion, as they were 54% long. Previously, 64% of positions were long. This indicates that as the decline began, traders began to take profit and/or short the currency exchange rate.
In addition, the proportion of long positions of Saxo bank traders is 53%. Saxo traders have not changed their opinion, as 52% were long previously.
Spreads (avg, pip) / Trading volume / Volatility