- SWFX market sentiment is 63% bearish (-1%)
- 58% of pending orders in the 100-pip range are to BUY the Greenback
- Notable resistance around 111.55
- Upcoming events: US Import Prices m/m, Japan's Leading Indicators
The Greenback feel sharply against the Japanese Yen on the disappointing labour market data. . The USD/JPY currency pair dropped 23 base points or 0.20% to the 113.07 level.
The US employment growth weakened significantly in December due to a decrease in retail jobs, while a surge in monthly pay gains indicated the labour market strength, which could enable the Federal Reserve to hike interest rates in Spring. The Labour Department stated that the non-farm payrolls increased 148K in the reported month, following an upwardly revised 252K in November. Job growth is anticipated to moderate as the labour market remains close to full employment, though with some chances to get a boost from $1.5T tax cuts package.
Minor releases
The only notable fundamental event from the US today is the monthly Import Prices at 1330GMT. Meanwhile, Japan's Cabinet Office is to release the country's Leading Indicators for November at 0500GMT on Thursday.
USD/JPY breaks from triangle
In accordance with expectations, the Dollar continued to lose value against the Yen. However, the downfall appeared to be stronger than expected, as the currency rate managed to break through the lower trend-line of a six-week long symmetrical triangle.Accordingly, the closest support barrier that might turnaround the pair is located near the 112.05 mark, which has successfully managed to stop the rate from falling during the previous three attempts. In case this barrier is broken, the pair will have an empty area up until the 200-day SMA at 111.72 and the 23.6% Fibonacci retracement level at 111.65.
Generally, there is a need to take into account that majority of pending orders in 100-pip range are set to buy plus the aggregate market sentiment remains almost 53% bullish.
Hourly chart
USD/JPY was driven by strong downside risks early on Wednesday. As a result, the pair dashed through various support levels, including the 100-day SMA circa 112.20. It is unlikely that the Greenback plunges below the 111.60 mark today, as this area is supported by the 200-day SMA, the weekly S2 and the monthly S1.
Meanwhile, the expected recovery might be restricted by the monthly PP at 112.63.
Daily chart
The bearish SWFX market sentiment has slightly weakened today with 63% short positions (-1%). Meanwhile, 56% of pending orders are to buy the Greenback (-1%).
The market sentiment of OANDA traders has turned bullish with 53% long positions (+3%). Saxo Bank clients remain bullish, as 53% of open positions are long (+2%).