- SWFX market sentiment is 65% bullish
- 57% of pending orders in the 100-pip range are set to BUY
- Pair meets resistance near 109.00 mark
- Minor US releases on Monday
The US Dollar continued to lose ground against the Japanese Yen in the previously set medium term channel down pattern. Most likely the decline will continue in this way until the lower trend line of a dominant channel down pattern is reached.
The US economy revealed weaker-than-anticipated expansion pace in Q4, as solid consumer spending resulted in an increase in imports. The Commerce Department stated that the US gross domestic product rose at a 2.6% yearly rate in the December quarter, compared with 3.2% in the Q3, being restrained by an expanding trade deficit and moderate inventory accumulation.
Meanwhile, durable goods orders rose 2.8% in December, with the US manufacturers benefiting from a solid global growth and a weaker currency, supporting the country's exports.
Minor US data
The week is set to start slowly for macroeconomic event swing traders. At 13:30 GMT the rather insignificant data sets of Core PCE Price Index and the US Personal Spending will be published. History has revealed that they do not cause notable fluctuations. However, they might trigger short term trader's stop losses.
Due to that reason this data release is not going to be covered by the Dukascopy Analytics team. However, the rest of the week has more important events scheduled. Due to that reason watch closely the economic calendar.
USD/JPY remains below 109.00 mark
After rebounding from the lower boundary of a breached four-month channel down early on Friday, the US Dollar was guided by the 55-hour SMA until a strong hourly plunge around 1400GMT pushed the rate towards the bottom boundary of a six-week channel.This fall was caused by BOJ Governor Kuroda's comments in Davos where he claimed that Japan was getting close to its 2% inflation target, thus putting upward pressure on the Yen.
A test of the aforementioned channel was followed by a rebound back to the 55-hour SMA within the Asian session.
Technical indicators remain bearish. A possible upside target today could be the 100-hour SMA and the weekly PP circa 109.50, while the nearest support is the distant weekly S1 at 107.53.
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 supporting trend line is located below the 108.00 mark.
In the near future, the pair will be slowed down by the lower trend line of the described junior pattern.
However, last week we expected to see this weeks calculated pivot points. In contradiction to what was expected, there are no notable support levels, which might slow down the surge of the US Dollar against the Yen.
Daily chart
SWFX traders are on the long side, as 64% 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 70% long positions (+1%). Meanwhile, Saxo Bank clients are likewise bullish, as 55% (-2%) of open positions are long
Spreads (avg, pip) / Trading volume / Volatility