- SWFX market sentiment is 66% bullish (-3%)
- Pending orders in the 100-pip range are 51% to BUY
- All quiet until Wednesday evening
The Decline of the US Dollar against the Japanese Yen has ended. However, it might not be for long. The reason for that is the fact that the currency pair still remains in a long term channel down pattern. Moreover, the pair is set to meet additional resistance soon.
The Japan's Yen rose against the Greenback, following the report on the country's trade balance on Sunday. The USD/JPY exchange rate gained 13 base points or 0.12% to 106.27.
The Japan's exports grew ¥0.37T in January, surpassing forecasted ¥0.14T and showing 14th month of growth in a row. Meanwhile, the country's Ministry of Finance showed that a surge in imports put trade deficit in the red for the first time since May.
However, higher imports indicating an improvement in domestic demand confirmed that the BoJ moved forward in efforts to set up a self-sustaining recovery of the Japan economy. Experts warned that the strengthening Yen is a risk, as it is likely to make imports cheaper, putting pressure on inflation.
Nothing until Wednesday
As the second empty session of the week was in progress, the Dukascopy research team looked upon the future. Namely, late part of Wednesday's trading will have a notable event.
The FOMC Meeting Minutes are set to be released at 19:00 GMT. However, the data release will not be covered by the Dukascopy Research team.
USD/JPY pushes higher
The US Dollar continues to gain value against its Japanese counterpart for the third consecutive session. The pair breached the 55– and 100-hour moving averages and the upper boundary of a two-week descending channel during the previous 24 hours, thus adding to the overall bullish sentiment.Given that the pair is moving neatly towards the senior channel, the 108.00 area could be reached later in the week. However, the current steepness is unlikely to hold, as technical indicators point to a possible bearish correction. This fall is expected to be brief, as the southern side is supported by the 100– and 55-hour SMAs circa 106.40.
Meanwhile, bullish gains should be capped near the 107.50 mark where the long-term moving average is located.
Hourly Chart
The US Dollar continues to trade in a narrow channel against the Yen in force since late December, 2017. The pair fell to its lower boundary last week and has since shown some signs of recovery. Daily technical indicators are likewise supportive of a possible surge within the following few days.
Daily chart
SWFX traders are on the long side, as 65% of open positions were bullish during the morning hours (-4%). In addition, 60% (-2%) of pending orders are to buy the Greenback.
Meanwhile, the market sentiment of OANDA traders remains strongly bullish with 74% long positions. In addition, the Saxo Bank's published market sentiment is 56% long
Spreads (avg, pip) / Trading volume / Volatility