- SWFX market sentiment is 51% bearish
- 74% of pending orders in a 100-pip range are to sell
- Significant support is located at 111.10
- Minor releases scheduled for this session
The USD/JPY exchange rate was little changed after the Bank of Japan's interest rate decision announcement. However, the further reaction on the Bank's press conference put the pair to a two-month high of 112.70, where the US Dollar strengthened against the Yen by more than 0.15%. Both events managed to keep USD/JPY above the 112.0 level, though the pair returned to the 111.80 area in the early Friday trading session.
However, the further reaction on the Bank's press conference put the pair to a two-month high of 112.70, where the US Dollar strengthened against the Yen by more than 0.15%. Both events managed to keep USD/JPY above the 112.0 level, though the pair returned to the 111.80 area in the early Friday trading session.
Minor releases from US
It is unlikely that this trading session is significant for USD/JPY in terms of fundamentals, as only two minor sets, namely the US Flash Manufacturing PMI and Flash Services PMI at 1345GMT, are to be released.
USD/JPY falls amid North Korean statement
In result of combination of technical factors and fundamental events, the currency pair made a turn around a broke though the bottom boundary of a previously dominant ascending channel. From technical point of view, the rate encountered a resistance level formed by the monthly R2 at 112.54 and the upper boundary of a long-term falling wedge.From fundamental perspective, the new threat from North Korea only accelerated depreciation of the buck. In the short run the currency rate might try to restore some lost positions, using the 100-hour SMAs or the monthly R1, as a springboard. But, in general perspective, the pair is expected to enter into a new long bearish phase.
Hourly chart
After testing the upper boundary of a long-term falling wedge, the rate reversed to the downside on Friday. Thus, next week might demonstrate if the US Dollar is to initiate a new wave down. The upside is guarded by the weekly R2, and the rate is supported by the 200-day SMA and the weekly R1 near the 112.10 mark. In case the latter is broken, no barriers are limiting the pair down to 111.30.
Daily chart
SWFX sentiment is almost at equilibrium on Friday but nevertheless with slight prevalence of bears, as 51% of traders are holding short positions. In addition, 62% of current pending orders are to sell the US Dollar (+11%).
OANDA traders are bullish on the Greenback, with 54% of its clients having long positions (-3%). In addition, 52% of Saxo Bank traders are likewise holding long positions (-1%).