- SWFX market sentiment is 58% bearish (-4%)
- 64% of pending orders in the 100-pip range are to BUY
- Bank holiday in Japan
- Upcoming events: US Average Hourly Earnings m/m, US Non-Farm Employment Change, US Unemployment Rate, US Trade Balance, US ISM Non-Manufacturing PMI, US Factory Orders m/m, FOMC Member Kashkari to speak
The Labour Department said that the US worker productivity grew 3.0% year-on-year in the Q3, the fastest growth pace in nearly three years, which fuelled diminishing of labour costs.
But, data pointed to the US growth to be sustained, keeping the chances for the Fed rate hike.
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Focus on US data
The last day of this trading session is devoted entirely to fundamentals coming from the United States, as banks in Japan are closed in observance of Culture Day.
The US Bureau of Labour Statistics is set to publish the Average Hourly Earnings, Non-Farm Employment Change and Unemployment Rate for the previous month at 1230GMT. Data on Trade Balance is likewise released at the same time.
Subsequently, the ISM Non-Manufacturing PMI and monthly Factory Orders are to be published at 1400GMT.
Finally, President of the Federal Reserve Bank of Minneapolis Neel Kashkari is due to speak about monetary policy and the 2018 outlook at the Women in Housing and Finance luncheon at 1615GMT.
Read More: Fundamental Analysis
USD/JPY anticipates US Employment Change release
None of the yesterday's events created an impulse strong enough to force the pair to make a breakout from the rectangle pattern. Moreover, expectations of the upcoming release of information about the state of the American labour market led to formation of a minor symmetrical triangle pattern.A sharp plunge looks unlikely, as the southern side is reliably protected by a combination of the 100- and 200-hour SMAs together with the weekly PP at 113.79. On the other hand, a resistance area between the 114.25 and 114.35 levels managed to neutralize surge of the rate more than once in the past.
Nevertheless, if the employment change appears to be really positive, traders with bullish outlook are likely to use this occasion to try to elevate the pair to the July 2017 maximum at 114.50.
Hourly chart
Even though the US Dollar was fluctuating significantly against the Yen on Thursday, the rate managed to close the session with only slight losses. Thus, it remains located within the same range for the second consecutive session.
As apparent on the chart, the rate is located near the upper boundary of a long-term descending triangle circa 115.00. It is likely that the pair tries to approach this trend-line during the upcoming two weeks.
Daily chart`
Read More: Technical Analysis
Bears take the upper hand
SWFX market sentiment remains bearish on Friday, as 58% of traders are holding short positions (-4%). Meanwhile, 58% of pending orders are now bullish (+8%), compared to 50% yesterday.
The bearish market sentiment of OANDA traders has increased, as 60% of open positions are short (+2%). Meanwhile, the number of open positions for Saxo Bank clients is now 52% long (+2%).