- SWFX market sentiment is 52% bullish
- 56% of pending orders in the 100-pip range are to BUY the Greenback
- Notable support near 110.00
- Quiet end of the week for fundamentals
On Friday morning the USD/JPY currency pair began a decline, which was the result of encountering the various resistance levels clustered near the 111.50 mark. Moreover, the currency pair was likely going to reach a dominant patterns support line.
Building permits were down 0.1% to a 1.30M units rate in December, adding to a total 4.7% rise to a rate of 1.26M units in 2017, the strongest level in ten years.
The reports also revealed that the US homebuilding activity decreased more than anticipated by the end of 2017 to mark its largest drop in just a year, due to a steep fall in the single-family housing units construction.
Nothing at the end of the week
Friday will have no notable data being released, which might affect the financial markets through the strength of the US Dollar. Due to that reason technical analysis moves to the front of trading.
Although, traders should look forward to next week. The US Advance GDP is set to be released on Friday. This data release is going to cause an increase of volatility.
USD/JPY points to possible decline
Even though the Greenback was tended southwards on Thursday, it remained stranded between the monthly S2 and the 200-, 55– and 100-hour SMAs for the whole session.The pair was testing the 100-hour SMA and the bottom boundary of a short-term channel circa 110.80 at the time of this analysis. From theoretical point of view, the US Dollar should pick up speed and approach the long-term moving average.
This assumption, however, is not supported by technical indicators that suggest a strong decline. This scenario is likely to occur if the 110.80 area is breached. A subsequent fall, however, should not exceed the 110.20 mark where the monthly S2 and the weekly S1 are located.
Meanwhile, the upside target for today is the 111.50 mark.
Hourly chart
By looking at the daily chart one sees that the pair still is approaching the support line of a dominant long term channel pattern. Namely, the support is located just below the 110.00 mark. Due to that reason it is expected that this decline eventually will reach that level. Afterwards, a rebound and a formation of a new medium term pattern would occur.
Daily chart
On Wednesday morning SWFX traders were more on the long side, as 53% of open positions were bullish. Meanwhile, 60% of pending orders are to buy the Greenback (-4%).
The market sentiment of OANDA traders remains bullish with 60% long positions (-7%). Meanwhile, Saxo Bank clients are likewise bullish, as 61% (+4%) of open positions are long
Spreads (avg, pip) / Trading volume / Volatility