- SWFX market sentiment is 63% bullish
- 57% of pending orders in the 100-pip range are bearish
- Pair trades just above 108.50 mark
- US GDP and Durable Goods at the end of the week
The junior channel down pattern of the USD/JPY currency exchange rate has managed to break the dominant descending channel. The move came due to the large bearish pressure on the US Dollar, which increased even more during the previous trading sessions. Namely, the Treasury Secretary of the United States.
The USD/JPY exchange rate depreciated 23 base points to the 110.68 level, following the BoJ monetary policy statement and the outlook report. Though, the pair managed to recover in the next couple of hours to be above the 111.00 mark, as the Bank's Governor made dovish remarks, sending rate higher.
The Bank of Japan kept the interest rate unchanged at a negative 0.10%, as widely anticipated, offering a more optimistic view on consumer inflation projections, underscoring the conviction that the Japan economy was making moderate, but steady progress to the 2% CPI growth target. Later, the BoJ Governor Haruhiko Kuroda indicated that the Bank was not in a position to consider the QEE quit.
US data release on Friday
As the Bank of Japan event occurred, the focus for swing traders has shifted to another release.
On Friday the Advance GDP of the United States will be published at 13:30 GMT. The GDP will be accompanied with the US Durable Goods data sets at the same time.
USD/JPY falls below 109.00
The bearish momentum that prevailed on Tuesday continued to dominate the market on the following day, as well. As a result, the US Dollar experienced a considerable 0.98% fall against the Yen on Wednesday.It seems that this session might finally mark a change in the previous sentiment. The pair reached the weekly S3 near the 108.90, but was rather reluctant to edge lower. This mark coincides with the bottom boundary of a five-week descending channel.
Thus, the base scenario favours a period of appreciation towards the 110.20 area where the weekly S1, the monthly S2 and the 55– and 100-hour SMAs are located.
In case high volatility is not apparent in this session, the Greenback might remain near the breached senior channel circa 109.60.
Hourly chart
By looking at the daily chart one can see that the situation has changed a lot.
It can be seen that the next notable support trend line is located below the 108.00 mark. However there are other support levels until that mark.
Namely, the pair will be slowed down by the lower trend line of the described junior pattern. Moreover, it should make stops at the next week's pivot points, which will be revealed on Monday.
Daily chart
SWFX traders are on the long side, as 63% of open positions were bullish. Meanwhile, 52% of pending orders are to buy the Greenback.
The market sentiment of OANDA traders remains bullish with 65% long positions (+5%). Meanwhile, Saxo Bank clients are likewise bullish, as 52% (-2%) of open positions are long
Spreads (avg, pip) / Trading volume / Volatility