- SWFX market sentiment is 52% bearish
- 51% of pending orders in the 100-pip are to SELL
- Minor release of ISM Non-Manufacturing PMI at 14:00 GMT
On Tuesday morning it could be noticed that the US Dollar was attempting to break the medium term resistance against the Yen, which was discovered only on Monday. Meanwhile, the rate's short term surges above the medium resistance were stopped by the psychological resistance of the 110.00 mark.
The Bureau of Labor Statistics simultaneously released three data sets, where Average Hourly Earnings data that came out better-than-expected of 0.3%, compared to the 0.1% in the previous period.
Moreover, Non-Farm Employment Change data came out better-than expected of 223K, instead of economists forecast of 189K, and Unemployment Rate data came out to be less-than-expected of 3.8%.
US ISM Non-Manufacturing PMI
First release of the week, which might impact the US Dollar's strength and subsequently all financial instruments that involve it, is also the last one. In addition, it is not expected that an even medium increase of volatility will occur due to the macroeconomic data release.
Namely, the ISM Non-Manufacturing PMI is set to be released at 14:00 GMT. The data release will be covered on the bank's live webinar platform. The event will begin at 13:50 GMT.
USD/JPY sets 110.80 as target
The USD/JPY exchange rate was tended north on Monday but wit no large gains apparent during this session. By Tuesday morning, the pair was located at a one-week channel slightly below the 110.00 mark.If looking on the 4H chart, the pair surpassed the 100-period SMA—a move which might be interpreted as a bullish sign. This means that the US Dollar could breach the nearby weekly R1 and 61.80% Fibonacci retracement at 110.20 and continue its upward movement until the monthly R1 and the weekly R2 at 110.80.
In terms of downside potential, the 55-hour SMA could provide strong support at 109.60 and thus guide the pair back north. Meanwhile, it is unlikely that the 200– and 100-hour SMAs and the weekly PP at 109.20 are breached.
Hourly Chart
The rebound, which started on Friday on the daily chart, continued at the start of this week. However, it was set to meet various resistance levels in the form of pivot points, Fibonacci retracement levels and a daily simple moving average.
Namely, the currency exchange rate was set to face the combined resistance of the weekly PP, 200-day SMA and the 61.80% Fibonacci retracement level were all located together at the 110.20 mark. If that level would get broken, the 110.80 mark would be targeted next.
Daily chart
On Tuesday, Swiss Foreign Exchange market sentiment had become slightly bearish, as 52% of open positions were short. Previously, 54% of Swiss traders were long.
Meanwhile, trader set up orders were no longer set to sell. Instead 54% of orders were set to buy.
This indicates that some have opened short term short positions in an effort to possibly profit from the bounce off from the mentioned resistance levels. However, they are set to close the shorts and reopen long positions, as a rebound begins to occur.
The market sentiment of OANDA traders has been constantly largely bullish, as 60% of their traders are still holding long positions. In addition, the proportion of long positions of Saxo bank traders is 55%.
Spreads (avg, pip) / Trading volume / Volatility