- SWFX market sentiment is 61% bearish
- 56% of pending orders in the 100-pip range are to buy the Pound
- Strong resistance is located near the 112.70 mark
- Upcoming events: ADP Non-Farm Employment Change
The Institute for Supply Management stated that its non-manufacturing PMI for the US fell to 57.4 in November, compared with 60.1 in October, suggesting that the services sector's growth slowed due to moderation in both export and new orders.
Another release showed that the country's trade deficit widened to a nine-month high in the same month amid higher oil prices and lingering deficits with Mexico and Canada, despite the strong increase of exports to the both countries.
ADP Non-Farm Employment Change
The only significant data release in this session is the US ADP Non-Farm Employment Change for November at 1315GMT.
Meanwhile, there is also some minor releases during the day, such as the US Revised Nonfarm Productivity and Revised Unit Labour costs for the third quarter of 2017 at 1330GMT, as well as the US IBD/TIPP Economic Optimist; release time remains tentative.
USD/JPY rebounds from 200-hour SMA at 112.00
Beginning of joint drills between South Korean and American armies near North Korean border led to another rise in demand for safe haven assets.Accordingly, the pair has reached combined support created by the weekly PP, the 200-hour SMA and the lower trend-line of a new junior descending channel. This fact point out on the upcoming recovery of the pair.
As soon as markets will calm down, the rate is likely to start climbing back towards the 112.50 mark that is surrounded by the 50% Fibonacci retracement level and two other moving averages. However, if the situation on the Korean peninsula will continue to aggravate, the pair might take the opposite direction and try breaking the above support.
Hourly chart
The US Dollar failed to gain enough momentum to move above the weekly PP and the 55-hour SMA near on Tuesday.
This situation has activated bears that had already managed to reach the weekly PP at 111.98 by early Wednesday. The ultimate low for this session is the 111.70 territory where the combined resistance of the 200- and 100-day SMAs and the 38.2% Fibo is located.
Meanwhile, technical indicators suggest that the pair could trade higher during the following two days.
Daily chart
The bearish SWFX sentiment has remained at the same level, as 61% of open positions are still short. Meanwhile, pending orders in this session are at equilibrium.
OANDA traders are bullish on the pair, with 51% of open positions being long (-1%). In addition, the number of open positions of Saxo Bank clients is 55% long (+4%).