- SWFX market sentiment is 69% bullish
- Pending orders in a 100-pip range are at equilibrium
- Gains could be capped near 109.77
- Upcoming events: US JOLTS Job Openings, Japan's BSI Manufacturing Index, Japan's PPI y/y
The Institute for Supply Management reported that its PMI for the US non-manufacturing sector posted weaker-than-expected increase to 55.3 in August, following the prior month's figure of 53.9.
An expansion was fuelled by strong increase in new orders and employment, suggesting the weaker job growth registered last month was temporary. Data indicated the US economy is set to gather momentum early in the Q3.
Calm session for USD/JPY traders
The economic calendar for this session includes several data releases of minor and intermediate importance. These, however, should not impact the market in any way. The United States is to publish the Job Openings and Labor Turnover Summary (JOLTS) at 1400GMT. In addition, Japan is to release its Business Survey Index for the second quarter of 2017 and the Producer Price Index (PPI) at 2350GMT.
USD/JPY tests 109.60
In line with expectations, the US Dollar surged against the Yen on Monday, resulting in a 117-pip appreciation within one day. The pair crossed several resistance levels, including the 200-hour SMA at 109.30, and has since showed lack of volatility during this morning. This minor consolidation phase might suggest that bulls have exhausted their upward force and thus give the dominant hand to bears instead. The upside is guarded by the monthly PP and the upper boundary of a channel down circa 109.80—a level that might be a turning point for the rate. Subsequent direction is expected to be to the downside. In case no massive events shake the market, the rate might continue its movement sideways for several hours before dashing towards the 100-hour SMA at 108.60.Hourly chart
Mitigated political tensions have helped the US Dollar to appreciate against the Yen for the second consecutive day. The strong bullish sentiment has diminished; however, the rate still tries to push up to the monthly PP at 109.77. The pair is supported by the weekly R1 and the 20-day SMA circa 109.40. The next support is set by the relatively distant monthly S1 at 108.49.
Daily chart
SWFX market sentiment has remained at the same level for the third consecutive session, as 69% of traders are holding open positions. Meanwhile, 58% of pending orders are to buy the US Dollar (-1%).
OANDA is 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 (-1%).