- SWFX market sentiment is 66% bullish
- 55% of pending orders in a 100-pip range to sell
- Gains could be capped near 109.30
- Upcoming Events: US S&P/CS Composite-20 HPI y/y, US CB Consumer Confidence, Japan's Retail Sales y/y
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.
Main event - CB Consumer Confidence
The economic calendar for Tuesday's trading session includes some minor data from both the US and Japan, such as monthly US S&P/CS Composite-20 HPI at 1300GMT and monthly Japan's Retail Sales at 2350GMT. However, the main attention today is put on Consumer Confidence released by the US Conference Board at 1400GMT.
USD/JPY falls as North Korean crisis escalates
In result of a new ballistic missile test conducted by North Korea, the American Dollar lost 0.57% against the Japanese Yen just in two hours. Accordingly, in the first half of Tuesday the buck is expected to try to recover some of the lost value. However, even if it succeeds to break through the upper boundary of a junior descending channel, the pair most likely will fail to climb above 109.28, as this resistance level is reliably protected by a combination of the weekly PP and the 55-, 100- and 200-hour SMAs. In addition, there is a need to take into account another fundamental event that will happen at 14:00 GMT, i.e. a release of data on the US CB Consumer Confidence.Hourly chart
USD/JPY is being driven by strong downside momentum in this session, as it has already managed to dash through the weekly and monthly S1s and reached the 108.40 mark. This sentiment is likely to allay, as the US Dollar may try to recover some daily losses. The nearest resistance is set by the aforementioned S1s, while support is provided by the weekly S2 at 108.07.
Daily chart
SWFX market sentiment is bullish on Tuesday, as 66% of traders are holding open positions (+2%). Furthermore, 56% of pending orders are to buy the US Dollar (+1%).
OANDA clients are likewise bullish on the pair, with 63% of its clients having long positions (+1%). Similar viewpoint is held by Saxo Bank clients with 58% long positions (-6%).