- SWFX market sentiment is 59% bearish
- 53% of pending orders in the 100-pip range are to BUY the US Dollar
- Nearest resistance set by the distant weekly R1 at 113.58
- Upcoming events: US Existing Home Sales, Japan's Monetary Policy Statement, BOJ Policy Rate, BOJ Press Conference
The US Dollar kept strengthening against the Japanese Yen on the US property market data and current account report. The USD/JPY currency pair rose modestly to the 112.76, targeting the weekly high at around 113.20.
The US single-family housing starts and building permits increased to the ten-year highs in November, providing a hopeful sign for the real estate market that was hindered by supply constraints. The Commerce Department stated that in overall building permits were at a 1.298M unit rate in November, being put slightly down by a weaker permits for multi -family houses' construction. However, an increase in groundbreaking singe-family homes could contribute to GDP in the Q4.
BOJ in focus
The only data release today is the US Existing Home Sales to be published at 1500GMT.
More significant fundamental events are scheduled for early Thursday when the Bank of Japan releases its Monetary Policy Statement and Policy Rate. Their time, however, is tentative. BOJ Press Conference is set to take place at 0630GMT.
USD/JPY tests resistance zone near 113.10
In the middle of previous trading session, the currency exchange rate made a confident breakout from a symmetrical triangle pattern. In accordance with expectations, the surge was stopped in resistance zone formed by the 200-hour SMA and the 50% Fibonacci retracement level located at 113.00.An allocation of pending orders suggests that markets are eager to see further appreciation of the Dollar against Yen. A successful vote on tax bill later this day theoretically might throw the rate straight to the weekly R1 at 113.57.
However, until that the currency pair is expected to continue slowly climbing to the top in a little rising wedge formation. By the way, if assumption about this pattern is correct, then the rate might plunge back to support zone located around the monthly PP at 112.70.
Hourly chart
The US Dollar was driven by strong upside momentum on Tuesday, as it managed to dash through the resistance of the weekly and monthly PPs and the 55-day SMA. It is more likely that the pair ends this session in the green area.
The scope of the bullish sentiment, however, is unclear, as the Greenback might even go as high as the weekly R1 at 113.58.
Daily chart
Traders have reduced their bearish SWFX sentiment with 59% of open positons currently being short (-5%). Meanwhile, 57% of pending orders are to buy the US Dollar (+5%).
OANDA traders are bullish on the pair, with 56% of open positions being long (+4%). Saxo Bank clients are holding 51% long positions (-3%).