- SWFX market sentiment is 74% bullish (+4%)
- 66% of pending orders in the 100-pip range are set to BUY
- US strengthens in the morning
- Upcoming events: US Unemployment Claims, Japan's M2 Money Stock y/y,
Economic activity in the US services sector was the strongest in more than 12 years, supported by rising new orders, suggesting that the economy sustained the strong momentum in the beginning of the year. The ISM survey showed that its non-manufacturing PMI jumped to 59.9 in January, from 55.9 in the prior month.
The US economy kept expanding even before the stimulus from a $1.5T tax cut program has begun to filter through. However, that is likely to cause some concerns that the country's economy could overheat.
Quiet session
Similarly to yesterday, no important fundamentals are scheduled for this session. The US Department of Labour will release the weekly unemployment claims at 1330GMT, while the Bank of Japan is to publish its M2 Money stock during January at 2350GMT.
USD/JPY re-tests trend-line
USD/JPY continues to trade in the same for the second consecutive day. After testing the weekly S1 at 108.90, the US Dollar managed to gain momentum and re-test the weekly PP at 109.70. It has since been supported by the 55– and 200-hour SMAs.USD/JPY continues to trade in the same for the second consecutive day. After testing the weekly S1 at 108.90, the US Dollar managed to gain momentum and re-test the weekly PP at 109.70. It has since been supported by the 55– and 200-hour SMAs.
On the other hand, the rate's failure to edge higher should result in a breakout of all three moving averages and a decline down to the weekly S1 and the bottom boundary of a two-week channel near the 108.80 mark.
Hourly chart
As apparent on the chart, the rate is still trading in a narrow five-week descending channel. Given the current positioning of the pair, traders might see a soon breakout to the upside that could be followed by a short-term surge.
In terms of today, the pair still remains in the same trading range between the weekly PP and S1. The overall tendency, however, seems to be northwards, thus favouring a soon breakout of the former.
Daily chart
SWFX traders are on the long side, as 74% of open positions were bullish during the morning hours (+4%). In addition, 66% of pending orders are to buy the Greenback (unchanged).
The market sentiment of OANDA traders remains strongly bullish with 68% long positions (+3%). Saxo Bank clients are likewise bullish, as 58% of open positions are long (-1%).
Spreads (avg, pip) / Trading volume / Volatility