- SWFX market sentiment is 51% bullish
- Pending orders in the 100-pip range are neutral
- Notable support near 110.00
- Bank of Japan and US GDP in focus this week
On Monday morning the US Dollar continued to decline against the Japanese Yen. In general, the currency pair was set to reach down to a support cluster, which was located just above the 110.00 mark. However, the pair's movements were about to experience a large increase of volatility.
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.
Important events for the USD/JPY pair
There are two notable events set to occur during this week, which are set to largely increase the volatility on the USD/JPY currency exchange rate's charts.
First of all Tuesday will be of utmost importance for the Japanese Yen. The Bank of Japan is set to release its Monetary Policy Statement and the BOJ Outlook Report. However, the most important event will be the announcement of the BOJ Policy Rate and the following Press Conference. However, the timing of the events is still tentative.
Meanwhile, there will be another important event this week. On Friday the Advance GDP of the United States will be published at 13:30 GMT.
USD/JPY faces SMAs
The bearish sentiment prevailed in the market on Friday. Despite breaching the 100-hour SMA, the US Dollar failed to move below this line, thus remaining in the 110.50/90 area by Monday morningAs apparent on the chart, the northern barrier is provided by the 200-, 100– and 55-hour SMAs and the weekly PP circa 110.80. It is unlikely that this strong resistance cluster is breached, thus pointing to a possible decline in this session. The daily low could be the monthly S2 and the weekly S1 near the 110.20 mark.
By and large, political events in the United States are expected to be a strong driving force today, and it therefore could cause sudden fluctuations. However, the psychological 111.00 mark should still hold strong.
However, the psychological 111.00 mark should still hold strong.
Hourly chart
A review of the daily chart has been conducted. It has been discovered, that by using the low levels of candles to set the support line of the long term channel down instead of the candle tails, the picture is different.
The currency exchange rate has already touched the lower trend line of the dominant channel down pattern. Due to that reason, the short term channel of the hourly chart might be broken in the near future.
Daily chart
SWFX traders are on the long side, as 51% of open positions were bullish. Meanwhile, 60% of pending orders are to buy the Greenback.
The market sentiment of OANDA traders remains bullish with 62% long positions (+2%). Meanwhile, Saxo Bank clients are likewise bullish, as 60% (-1%) of open positions are long
Spreads (avg, pip) / Trading volume / Volatility