- 56% of all pending orders are to buy the US Dollar
- 54% of all open positions are long
- The nearest significant resistance is around 111.80
- Downside potential down to 111.21
- Upcoming events: US CB Consumer Confidence, Fed Chair Yellen Speaks
Orders for US-made durable goods dropped more than expected last month, pointing to a slowdown in the manufacturing sector. The Commerce Department reported on Monday that durable goods orders fell 1.1% in May, following the preceding month's downwardly revised drop of 0.8% and falling behind expectations for a 0.5% decline.
In the meantime, core durable goods orders rose just 0.1% last month after dropping 0.5% in April, whereas analysts anticipated an increase of 0.4% during the reported month. Monday's data combined with the prior week's retail sales and inflation figures suggested that the economy failed to regain positive momentum in the June quarter despite the recent sharp drop in the jobless rate. Back in the Q1, the US economy expanded at an annualised 1.2% pace. Yesterday's data also showed that orders for machinery climbed 0.6%, while shipments dropped 0.3%. Orders for civilian aircraft dropped 11.7%, whereas orders for defence aircraft and parts plunged 30.8%. Orders for motor vehicles and parts advanced 1.2% last month.
Fed's Yellen to speak today
Two fundamental events should be taken into account in this trading session, as they may shift the market tremendously. Firstly, the US is to release data on consumer confidence at 1400 GMT. Secondly, the Fed Chair Janet Yellen is to speak about global economic issues at 1700GMT.
USD/JPY bearish in this trading session
Strong upside momentum guided USD/JPY for the whole trading session on Monday prior to reversing to the downside early on Tuesday. The US Dollar returned below the monthly PP at 111.80 and is expected to remain there, as bearish technical indicators suggest the prevalence of downside risks. From technical point of view, the pair broke the descending channel patter; thus a retracement down to the 111.30 mark, approximately, is likely to occur. There, the 200-hour SMA should support the rate, thus limiting further depreciation. The 55– and 100-hour SMAs in the 111.35/45 area may likewise halt the pair.Hourly chart
USD/JPY closed Monday's trading session slightly above the monthly PP at 111.80. The US Dollar has since crossed the give line and is expected to depreciate against the Yen, as apparent from intraday technical signals. From downside, the rate is restricted by the 55-, 200- and 20-hour SMAs in the 111.12/110.74 area. By and large, it is expected to remain between the monthly PP and the aforementioned SMAs today.
Daily chart
Trader sentiment has remained at the same level in this trading session, as 54% of all open positions are long. Meanwhile, 56% of pending orders are to buy the Greenback.
OANDA clients are even more bullish with 62% long positions, compared to 61% on Monday. Additionally, trader sentiment at Saxo Bank has decreased slightly, with 55% of all positions being long (58% on Monday).
Spreads (avg, pip) / Trading volume / Volatility
Traders remain bullish on US Dollar
Traders expect that the US Dollar is to appreciate up to the 113.12 mark against the Yen in three months' time. 57% of all forecasts fall above 112.50 yen, which is below the current spot price. The majority of voters expect the US Dollar to cost somewhere between 114.00 and 115.50 yen in three months, with 17% of survey participants choosing this trading range. Furthermore, the 108.00-109.50 and the 118.50-120.00 ranges were the second most popular ones with 14% of the votes.