- SWFX market sentiment is at equilibrium
- 52% of pending orders in a 100-pip range are to sell
- Significant resistance is located at 112.55
- Upcoming events: FOMC Members Evans and Kashkari to speak, Japan's Monetary Policy Meeting Minutes, Japan's SPPI y/y
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.
FOMC Members to speak
Fundamental events that should be monitored in this session are speeches by two members of the Federal Open Market Committee. The President of the Federal Reserve Bank of Chicago Charles Evans is to speak about economic conditions and monetary policy at The Economic Club of Grand Rapids Luncheon Meeting at 1640GMT. Meanwhile, the President of the Federal Reserve Bank of Minneapolis Neel Kashkari is to discuss the Federal Reserve at a town hall event hosted by the University of North Dakota at 2230GMT.
Late in the evening, Japan is to release Monetary Policy Meeting Minutes and the monthly Services Producer Price Index at 2350GMT.
USD/JPY continue to fluctuate near monthly R2 at 112.55
In accordance with expectations, the surge of the gold price did not last for long, as the pair was turned around by the monthly PP located at the 1,300.00 level, which transformed from support into resistance.At the moment, there are certain signs that the rate is going to try to climb to the top again. However, this new attempt is expected to fail due to presence of the 55- and 100-hour SMAs plus the updated weekly PP, which altogether additionally strengthen the above resistance level.
In addition to that, the further deprecation of the bullion against the gold is expected from a daily perspective, as the rate is fluctuating in a junior descending channel, which forms a part of a larger long-term ascending channel.
Hourly chart
Even though the strong downside momentum managed to push the Greenback below the 200-day SMA, the pair was reluctant to repeat this move on Monday morning. As a result, it is located in a narrow range between the 200-day SMA and the monthly R2 in the 112.20/111.55 territory. Additional confirmation is still needed to determine if the rate is to reverse to the downside towards the monthly R1 and the 100-hour SMA or it is to breach the descending wedge to the upside.
Daily chart
SWFX sentiment is at equilibrium on Monday, as an equal number of traders are holding both long and short positions. Meanwhile, 54% of current pending orders are to sell the US Dollar (-10%).
OANDA traders are bullish on the Greenback, with 56% of its clients having long positions (+2%). In addition, 52% of Saxo Bank traders are likewise holding long positions (unchanged from Friday).