- SWFX market sentiment is 60% bearish (+2%)
- 56% of pending orders in the 100-pip range are to BUY the US Dollar
- Strong support near 113.00
- Upcoming events: US Core Durable Goods Orders m/m, US Core CPE Price Index m/m, US Durable Goods Orders m/m, US Personal Spending m/m, US New Home Sales, US Revised UoM Consumer Sentiment
The US economy expanded at its strongest pace in two years in the Q3, fuelled by solid business spending. The Commerce Department stated that the country's gross domestic product rose at a 3.2% yearly rate in the Q3, missing expectations for a 3.3% growth.
Moreover, the US Congress approved tax cuts are set to encourage economic growth, though the risk of overheating is likely to occur with fiscal stimulus coming simultaneously with reaching the level of full employment.
US fundamentals
The economic calendar for Friday includes two sets of fundamentals. The US is to publish its monthly Core Durable Goods, Core CPE Price Index, Durable Goods Orders and Personal Spending at 1330GMT, as well as monthly New Home Sales and Revised Consumer Sentiment by the University of Michigan at 1500GMT.
USD/JPY finds support at 55-hour SMA
The bullish sentiment that prevailed this week was stopped abruptly by the weekly R1 at 113.58. As a result, the pair breached a short-term ascending wedge and tried to edge lower until the 55-hour SMA located circa 113.30 was reached.The bottom boundary of a one-week channel has not yet been reached. Thus, the pair might try to push for this line today. However, the 55-hour SMA might provide significant support.
It is likely that this moving average guides the pair for most of this session, thus stranding the US Dollar between this line and the weekly R1. The latter is likewise located near December high of 113.68.
On the other hand, the ultimate daily low is likely to be the 113.00 area where the 100– and 200-hour SMAs and the 50.0% Fibo are located.
Hourly chart
USD/JPY closed Thursday's trading session with minor 8-pip losses. The pair managed to move above the weekly R1 at 113.58, but failed to sustain its high positioning.
Friday morning demonstrated no changes to the exchange rate. The US Dollar had recovered almost all of its losses which occurred yesterday, but was nevertheless reluctant to move past the 113.45 mark.
Daily chart
SWFX market sentiment is bearish, as 60% of open positons are short (+2%). Meanwhile, 59% of pending orders are to buy the US Dollar (-3%).
OANDA traders have turned bearish on the pair, as they are holding 51% short positions in this session. Saxo Bank are also bearish with 56% short positions (unchanged from Thursday).