- SWFX market sentiment is 68% bullish
- 62% of pending orders in the 100-pip range are bearish
- Pair trades just above 108.50 mark
- US GDP and Durable Goods release
The decline of the US Dollar against the Japanese Yen has gained some breath due to a fundamental event. The recovery came in fast, as the US President Donald Trump spoke at the World Economic Forum at Davos. However, the rate resumed its decline on Friday morning.
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
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.
The data release is set to be covered on the live webinar by the Dukascopy research team. Tune in to the live webinar platform at 13:20 GMT.
USD/JPY reverses from medium pattern
The US Dollar was confidently moving lower against the Yen on Thursday prior to being boosted by Trump's comments later in the session. As a result, the Greenback strengthened 88 pips and managed to push even higher for several hours after the event.This bullish sentiment was reversed during the Asian session when downside risks took the upper hand once again. The pair might slide lower within the following hours towards the lower boundary of a five-week descending channel circa 108.50.
However, the US is to release it Advance GDP and Core Durable Goods Orders at 1330GMT that are likely to cause volatility in the market.
The southern side is supported solely by the weekly S3 at 108.90, while strong resistance is located near the 110.20 mark.
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 69% of open positions were bullish during the morning hours. Meanwhile, 61% of pending orders are to buy the Greenback.
The market sentiment of OANDA traders remains bullish with 69% long positions (+4%). Meanwhile, Saxo Bank clients are likewise bullish, as 57% (+5%) of open positions are long
Spreads (avg, pip) / Trading volume / Volatility