- SWFX market sentiment is 64% bullish
- 52% of pending orders in a 100-pip range to sell
- Gains could be capped near 109.80
- Upcoming events: FOMC Members Brainard, Kashkari and Kaplan speak, US Factory Orders m/m, Japan's Average Cash Earnings y/y
The Labour Department revealed that the US marked an increase of 156K new jobs over the course of August, which was below expectations, but strong enough to keep the country's economy growing at a steady pace.
Meanwhile, the unemployment rate rose to 4.4% from 4.3% in the same period. Despite moderation in the labour market, data showed nothing that could undermine the Fed's intention to start trimming its balance sheet.
FOMC Member speaches
The US is to publish monthly Factory Orders at 1400GMT. This event, however, is not considered a significant shaker for the market. Meanwhile, three FOMC Members are set to speak during the day, namely, the Federal Reserve Governor Lael Brainard, the President of the Federal Reserve Bank of Minneapolis Neel Kashkari and the President of the Federal Reserve Bank of Dallas Robert Kaplan at 1200GMT, 1710GMT and 2205GMT, accordingly. Lastly, Japan is to release monthly Average Cash Earnings at 0000GMT.
USD/JPY slips in channel down
The first half of the previous trading day the currency pair, indeed, spent in a limbo between two combined support and resistance barriers. However, a sharp appreciation of the buck by 37 basis points dragged the pair down right in the middle of a short-term symmetrical triangle. It seems that this pattern formed in anticipation of a release of information on the UK Services PMI. Even though the plunge towards the 200-hour SMAs seems a more reasonable scenario from a technical perspective, everything will depend on content of the report that will be published by the Markit at 8:30 GMT.Hourly chart
The resistance area set by the weekly and monthly PPs proved to be too strong for the US Dollar to overcome on Monday. The rate has consequently reversed to the downside just to re-test the lower boundary of the symmetrical triangle. The next support of importance is the relatively distant weekly S1 at 108.80.
Daily chart
SWFX market sentiment has slightly increased on Tuesday, as 64% of traders are holding open positions (+1%). Meanwhile, pending orders are at equilibrium.
OANDA is strongly bullish on the pair, with 62% of its clients having long positions (-2%). Similar viewpoint is held by Saxo Bank clients with 60% long positions (unchanged from Monday).