- SWFX market sentiment is 56% bearish (-2%)
- 51% of pending orders in the 100-pip range are to SELL
- US PPI and Unemployment Claims at 12:30 GMT
On Thursday, the USD/JPY surged up to the 111.00 mark. Although, the currency exchange rate remained in the descending pattern that has guided the rate during August.
On Wednesday, the Energy Information Administration released the US Crude Inventories data that came out higher-than-expected. Instead of the expected negative 2.8 million, the data came out only 1.4 million negative.
The Australia and New Zealand Banking Group announced on Wednesday: "Crude oil prices rose as the reality of US sanctions on Iran weighed on sentiment."
US PPI and weekly Unemployment Claims
On Thursday, macroeconomic data traders will tune in to the Dukascopy Webinar platform at 12:20 GMT for the US PPI and Unemployment Claims release cover.
Main attention will be paid to the Producers Price Index. Although, most likely the data will influence the strength of the US Dollar and subsequently all of the financial markets only a little bit.
USD/JPY likely to range today
Following a test of the 200– and 100-hour SMAs and the weekly PP at 111.40 early on Wednesday, the US Dollar began a new decline down to the 110.80 mark. This pushed the rate below the bottom boundary of the senior wedge.Short-term technical indicators are located in the oversold territory. Thus, it is likely that Dollar bulls try to use this opportunity and push the pair higher. It does face the aforementioned resistance cluster that should hinder or even halt any moves above this 111.40 level.
In case weak fundamentals put bearish pressure on the rate, the US Dollar should not fall below 111.60. In general, the expected trading range for today is 110.60/111.40.
Hourly Chart
Just like on the charts of the daily review of the hourly chart, the main attraction of the daily chart is the fact that the lower trend line of the massive long term ascending pattern was broken. The reasons for the breaking of the pattern most likely were the recent changes in the monetary policy of both the US and the Japanese central bankers.
It can be expected that by the end of July a new long term pattern will be clearly seen on the daily charts.
Meanwhile, note on the daily chart that the 55-day simple moving average provided additional support to the weekly S1 near the 110.60 mark.
Daily chart
Traders of the Swiss Foreign Exchange continue to short the USD/JPY currency pair, which is apparent by the 56% bearish positions. The sentiment has moved to the bullish side, as 59% of open positions were short on Wednesday.
Meanwhile, trader set up pending trade orders are no longer slightly shifted to the selling side. Namely, of the total set up orders 51% are set to sell, compared to the 53% previously.
Saxo Bank traders are also shorting the USD/JPY, as 54% of set up orders at the brokerage are short. Meanwhile, OANDA traders are 54% long on the pair.
Take into account the fact that OANDA mostly serves large institutional clients that are setting up their positions more long term. From that it can be deducted that the markets for now are expecting the rate to decline in the short term, but in the longer term a surge is expected. Although, new fundamental information can change the situation quickly.
Spreads (avg, pip) / Trading volume / Volatility