- SWFX market sentiment is 65% bullish
- 54% of pending orders in a 100-pip range to buy
- 53% of traders are bearish on the Yen
- Upcoming Events: US Core Durable Goods Orders, Jackson Hole Symposium
The American Dollar continued to advance against the Yen as it was expected yesterday. The reason behind this new direction was mostly associated with anticipation of the Fed Chair Janet Yellen speech that most probably will significantly affect the value of Dollar, at least in the short run.
The report showing an unexpected drop in the US new home sales in July boosted an initial fall in the USD/JPY. The Yen strengthened against the US dollar by 0.08% to reach the 109.39 mark, albeit the pair returned to testing pre-data levels in the Thursday's morning session.
The Commerce Department revealed that new home sales in the US fell 9.4% to a seasonally adjusted amount of 571K units in July, which was the strongest decline since December 2016. Weak figures raised concerns over the future recovery and healthy growth of the country's property market.
Data would be closely watched to evaluate whether enhanced supply conditions would help reinforce sales conditions in the next couple of months.
Fed Chair Yellen speaks
In the last of the week there will be two fundamental events that are worth following.
The first one is an announcement of latest information on the US Core Durable Goods Orders at 12:30 GMT. Dukascopy Research Team welcomes everyone to join a live discussion at our webinar that will begin at 12:00 GMT.
However, the key event of the week will happen at 16:00 GMT, when Janet Yellen will deliver her speech about financial stability at the Jackson Hole Symposium. The event is worth watching, as it expected to cause a lot of volatility in the markets.
USD/JPY stuck at 109.59
As it was expected, the American Dollar continued to gradually recover against the Japanese Yen in anticipation of the speech that will be delivered today at the Jackson Hole Symposium at 16:00 GMT.From a technical point of a view, the further surge of the buck is a quite possible scenario, as the pair has an obstacle-free area up until the upper boundary of a senior descending channel. The southern side, in contrast, contains various barriers, such as the 55- and 100-hour SMAs or the monthly S1.
However, if remarks from the Fed Chair will be disappointing, none of the above barriers could stop the fall of the rate that will be followed by an active acquisition of the Yen.
Hourly chart
Yesterday the currency pair made the first determined move over the week, as it has finally ended the day again in the long term triangle pattern. Such outcome allows assuming that the surge might continue also in the next week. On the other hand, a release of information on the US Core Durable Goods today in conjunction with Janet Yellen speech at the Jackson Hole Symposium might easily drag the buck back to the bottom.
Daily chart
SWFX market sentiment is bullish on Friday, as the number of open positions is 65% long. Furthermore, 56% of pending orders are to buy the US Dollar, while 53% to sell the Yen.
OANDA clients are likewise bullish on the pair, as 67% of all open positions are long. Similar viewpoint is held by Saxo Bank clients with 64% long positions.