- SWFX market sentiment is 65% short (+11%)
- Pending orders in the 100-pip are set to BUY in 55% of all cases
- No fundamental releases, Dukascopy weekly webinar at 1200GMT
A breakout from 112.10 should be the beginning of another decline.
The Census Bureau released monthly Retail Sales data that came out better-than-expected of 0.5%, compare to forecasted 0.4%.
Pablo Piovano, an Economist from FXStreet, said: "In addition, the NY Empire State manufacturing index came in above expectations at 22.60 for the current month, a tad lower than June's 25.00 reading. Looking ahead, spot is poised to remain under scrutiny in light of headlines from the Trump-Putin meeting and the upcoming testimonies by Fed's J.Powell on Tuesday and Wednesday."
Quiet day
The economic calendar is empty in this session. Tune in for a Dukascopy webinar at 1200GMT.
USD/JPY still weak after Thursday plunge
The most important development which disrupted the steady sideways movement of the USD/JPY pair was the 52-pip plunge during the second part of Thursday. This resulted in a breakout of the 55– and 100-hour SMAs and two channel lines, being stopped solely by the support of the 55-period (4H) and 200-hour SMAs and the monthly R2 near the 112.35 area.Technical indicators are bullish for this session, suggesting that this support cluster might hold the pair and thus reverse it back to north. In this case, the upside target is either the psychological 113.00 mark or the weekly R3 at 113.35.
Meanwhile, a successful southern breakout from 112.20 is likely to pressure the US Dollar close to the monthly R1 at 111.50.
Hourly Chart
The US Dollar has been strengthening against the Yen after reaching a new 2017/2018 low of 104.65 late in March. The pair breached the 55-, 100- and 200-day SMAs along the way.
The 200-day moving average provided support for the pair two weeks ago, thus allowing it to breach the prevailing one-and-a-half-year channel down and move towards 114.00.
The following weeks will show if the US Dollar is able to reach the upper boundary of a five-month channel near 115.00. It seems that the current bullish sentiment is starting to allay, thus giving opportunity for bears to send the pair back lower. The nearest support of significance on this long-term chart is the 200- and 55-day SMAs at 110.10.
Daily chart
Traders on the Swiss Foreign Exchange has increased considerably their bearish sentimenty, as 65% of open positions were short on Friday (+11%). Meanwhile, the number of pending orders is at equilibrium.
It means that the Swiss retail traders are no longer preparing to open more long positions. Instead, some have even taken profit by closing these positions.
OANDA traders are also bearish with 61% of their positions being short (+3%). Saxo Bank clients share the same sentiment with 53% short positions (-1%).
Spreads (avg, pip) / Trading volume / Volatility