- SWFX market sentiment is 51% bullish
- 51% of pending orders in the 100-pip range are to BUY
- US CPI might influence the USD
On Friday morning the USD/JPY currency pair traded near the 111.00 mark. Meanwhile, note that the volatility of the currency exchange rate has largely increased.
The Energy Information Administration released the US Crude Inventories data that came out higher-than-expected. Instead of the expected negative 2.8 million, the data came out only 1.4 million negative.
The Australia and New Zealand Banking Group announced on Wednesday: "Crude oil prices rose as the reality of US sanctions on Iran weighed on sentiment."
The US Consumer Price Index might cause trouble
In regards to the strength of the US Dollar and subsequently the financial instruments that involve the currency, there will be a notable data release occurring on Friday. Namely, the US CPI data sets will be published at 12:30 GMT. The cover of the data will start on the bank's live webinar platform at 12:20 GMT.
Meanwhile, macroeconomic data release traders are more likely going to pay attention to the data release cover at 08:20 GMT. At that time the UK GDP release webinar will begin. The data will be published at 08:30 GMT.
USD/JPY cannot pick up momentum
USD/JPY has been consolidating for the second consecutive day, as neither bulls nor bears have been able to leave the current range. Support was provided by the 110.80 mark, while the 55– and 100-hour SMAs still remain an unbreakable resistance level for the pair.If looking at the most junior channel, the US Dollar has diminished its trading range within this pattern. This suggests that the rate could soon follow the gradually-recovering technical indicators. However, 111.40 still remains a very strong resistance area, as the 55-, 100– and 200-period SMAs on both the 1H and 4H time-frames are located there.
It is unlikely that bulls gather the necessary strength to dash through the given barrier today. Bearish gains should be capped near the monthly S1 at 110.37.
Hourly Chart
Just like on the charts of the daily review of the hourly chart, the main attraction of the daily chart is the fact that the lower trend line of the massive long term ascending pattern was broken. The reasons for the breaking of the pattern most likely were the recent changes in the monetary policy of both the US and the Japanese central bankers.
It can be expected that by the end of July a new long term pattern will be clearly seen on the daily charts. Meanwhile, note on the daily chart that the 55-day simple moving average provided additional support to the weekly S1 near the 110.60 mark.
Daily chart
Traders of the Swiss Foreign Exchange are no longer bearish on the pair. Instead of the previous 56% domination of short positions, 51% of open positions were long on Friday morning.
Meanwhile, trader set up pending orders remain slightly bearish, as 51% of set up orders are set to sell the USD/JPY.
Saxo Bank traders are still shorting the USD/JPY, as 53% of set up orders at the brokerage are short. Meanwhile, OANDA traders are 53% long on the pair.
Previously it was noted from various sentiment data that the rate is set to decline only in the short term, as larger market participants were already long. On Friday, the assumption was strengthened, as the more short term sentiment of Dukascopy had shifted to the bullish side.
Spreads (avg, pip) / Trading volume / Volatility