- The Swiss traders are 56% bearish on the USD/JPY
- Trader pending orders in the 100-pip range are 53% to buy the pair
- USD/JPY is declining due to FOMC announcement
The decline of the USD/JPY is taking place because of the US Federal Reserve. Namely, the Federal Reserve announced that in 2019 they will do two rate hikes instead of the planned three. This new information is clearly signalling that the USD/JPY will be worth less than previously expected.
Latest Fundamental Event
The Federal Reserve releases US FOMC Meeting Minutes where fed officials provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
The key highlight from the official statement, "Fed raises target interest rate to 2.25-2.50 pct, reduces expected hikes for 2019 to two from three."
USD/JPY will be influenced by US data this week
On Thursday, the Bank of England will announce their rate decision. The event has caused moves from 26 to 97 pips since May 2018.On Friday the data releases will continue. During the morning hours, namely, at 09:30 GMT the UK Current Account will be published. This event causes moves from 15 to 45 pips.
The week's data will end at 13:30 GMT. At that time the Canadian Retail Sales and GDP data will be published. Simultaneously the US Durable Goods data sets and Final GDP will be released.
The above mentioned data release will be covered by Dukascopy Analytics. The event can be watched on our YouTube channel.
USD/JPY short term daily review
On Wednesday, the currency exchange rate broke the bottom boundary of the dominant pattern at 112.20 mark. During Thursday's morning hours, the US Dollar depreciated against the Japanese Yen by 76 pips or 0.68% to trade at the 111.86 mark.In regards to the near-term future, most likely, the currency exchange rate will trade sideways between the 50.00% Fibo and the weekly S2 at 111.64 mark. Besides, the 55-hour SMA might push the rate to trade at the 111.80 level.
On the other hand, the currency exchange rate could pass the support levels of the weekly S1 and the 38.20% Fibo to trade at the 111.20 level.
Hourly Chart
On the daily chart the rate is declining after encountering a resistance line that can be measured by connecting the high levels of the second part of 2018.
In general, the rate has passed both the 55-day and 100-day simple moving averages and faces no additional support on the daily chart.
Daily chart
The trader short sentiment continues to decrease. By the middle of Wednesday's trading 64% of open positions were short.
On Thursday, that sentiment was already 56% short. In general, traders are taking in the profits from shorting the USD/JPY
Meanwhile, trader set up pending orders, stop losses, take profits and position open orders in the 100-pip range were set to buy the USD/JPY in 54% of cases. Previously, the orders were set to sell.
The orders indicate that shorting of the pair is over. Instead take profits and stop losses are close by that will close the remaining short positions.