- SWFX market sentiment is 65% bearish (-7%)
- 61% of pending orders in the 100-pip range are to BUY
- Combined support lies circa 113.80
- Upcoming events: FOMC Member Dudley to speak, Japan's Average Cash Earnings
The Labour department revealed that the US job growth sped up in October, while the yearly wage growth as well as participation rate fell in the reported period, clouding the outlook of the job market.
The report showed that the country's economy added 261K jobs in the reported period, missing forecasts for a 310K increase. The weak pay growth is likely to hamper inflation to reach 2% target.
Quiet session
The only two fundamental events that should be mentioned in regard to USD/JPY are the speech by the President of Federal Reserve Bank of New York Willian Dudley who is to discuss lessons from the financial crisis at the Economic Club of New York at 1710GMT, as well as the Japanese Average Cash Earnings for the month of September at 0000GMT.
USD/JPY reaches July 2017 maximum at 114.50
A release of data that beat analysts' expectations not only signified a breakout from symmetrical triangle pattern but also provided a necessary impulse to reach the maximum of July 2017 located at the 114.50 level.That fundamental event was also significant for a couple of other reasons. First of all, it became evident that the pair is moving in a new minor ascending channel.
Second, an upcoming breakout from that pattern is unlikely due to pressure from the 55-, 100- and 200-hour SMAs that are rising along its southern boundary.
This, in turn, implies that currency rate has a good chance to bypass the weekly R1 at 114.69 and reach a combined resistance set up by the monthly R1 and the March 2017 maximum at 115.00 and the slope that started to form in the end of 2015.
Hourly chart
The US Dollar closed flat on Friday, even despite high volatility. The pair managed to push up to the weekly and monthly R1s circa 114.80 early on Monday but had already fallen back down to 114.20 a few hours later.
The Greenback might demonstrate high volatility in this session, but it should nevertheless remain between the aforementioned resistance cluster and the weekly PP located at 113.83.
Daily chart`
SWFX market sentiment remains bearish on Monday, as 65% of traders are holding short positions (+7%). Meanwhile, 51% of pending orders are now bullish, compared to 58% last Friday.
The bearish market sentiment of OANDA traders has increased, as 55% of open positions are short (-5%). Meanwhile, the number of open positions for Saxo Bank clients is now 53% long (+1%).