- SWFX market sentiment is 60% bearish (+2%)
- 58% of pending orders in the 100-pip range are to SELL
- Significant resistance is located near 112.65
- Upcoming events: US Existing Home Sales, Fed Chair Yellen to speak
The Commerce Department said that the US homebuilding rose to the highest level of the year in October, where housing starts jumped 13.7% to a seasonally adjusted yearly rate of 1.29M units, while building permits added 5.9% to a 1.30M unit rate in October.
Strong figures were expected to contribute to stronger economic expansion in the US over the course of the Q4.
Fed Chair Yellen to speak
Two fundamental events occurring in this session should be noted. The day will start with the US publishing its Existing Home Sales for the previous month at 1500GMT.
Meanwhile, the Fed Chair Janet Yellen participating in a panel discussion titled "In Conversation with Mervyn King" at the New York University Stern School of Business at 2300GMT.
USD/JPY expectedly surges to 112.62
In line with expectations, the currency exchange rate has successfully reached the 112.62 mark. But as this level was protected by the weekly PP, the pair was forced to retreat. Currently, it is fluctuating in a limbo between the 55- and 100-hour SMAs.Unless the buck receives a proper impulse it has little chances to break to the top. However, even if such momentum will be created the surge is not expected to exceed the 113.10 mark, which represents location of the 200-hour SMA. From the opposite direction an equal role plays support area located around the monthly S1 at 112.04.
Generally, there is a need to keep in mind that the aggregate market sentiment is bearish and the pair is fluctuating in a medium-term downtrend.
Hourly chart
After testing the monthly S2 at 112.05 last Friday, the US Dollar managed to recover half of its losses against the Yen yesterday and close slightly below the weekly PP.
The pair showed lack of volatility early in this session, as both support and resistance formed by the 55-day SMA and the weekly PP, respectively, were limiting wider trading amplitude.
Technical indicators are still in favour of further fall within this week.
Daily chart
The bearish SWFX sentiment has increased in this session, as 60% of traders are holding short positions (+2%). Meanwhile, 54% of pending orders are now to buy the US Dollar.
OANDA traders have once again turned bearish on the pair, as 52% of open positions are short on Tuesday. Conversely, the number of open positions of Saxo Bank clients is 56% long (+1%).