- SWFX market sentiment is 57% bearish (+2%)
- 56% of pending orders in the 100-pip range are to SELL
- Nearest resistance is located near the 111.65 mark
- Upcoming events: US New Home Sales, FOMC Member Kashkari to speak
Commerce Department stated that the US durable goods orders fell sharply 1.2% in October, while its core measure marked sligtly weaker increase of 0.4% in the same period.
However, the solid growth trend was sutained, pointing to the stronger contribution to the GDP in the Q4. Meanwhile, the FOMS minutes suggested that the key interest rate could be raised soon, if the medium-term prospectives remain upbeat.
Quiet session
This trading session includes two fundamental events, namely a US data release of intermediate importance and a speech. The US Census Bureau is to release data on New Home Sales for the month of October at 1500GMT, while the President of the Federal Reserve Bank of Minneapolis Neel Kashkari is due to speak at Winona State University's Town Hall Forum at 2230GMT.
USD/JPY prepares to test support at 111.20
In line with expectations, by the end of the previous trading session the currency rate has reached the upper boundary of a currently active descending channel. As this barrier was additionally backed up by the 38.2% Fibonacci retracement level as well as the falling 100-hour SMA, the pair was forced to rebound.During first half of the day the pair is likely to get back to the 11.60 mark amid the push made by the 55-hour SMA. But subsequently the pair is expected to test support area between the 111.20-111.10 levels.
Unless the Yen receives a proper impulse this barrier might ruin the pattern. However, such scenario unlikely to lead to rapid recovery of the buck, as on daily chart road to north is blocked by a combination of the 100- and 200-day SMAs.
Hourly chart
The pair's appreciation on Friday was disrupted by the strong resistance of the 100- and 200-day SMAs and the 38.1% Fibo circa 111.70. As a result, bears took the upper hand on Monday morning.
It is likely that the US Dollar pushes even lower during the first part of this week – possibly down to the weekly S1 or the monthly S2 at 110.84 and 110.45, respectively. The second part of the week, however, might mark a recovery where the rate returns to test the 200-day SMA.
Daily chart
The bearish SWFX sentiment has increased slightly on Monday, as 57% of open positions are short (+2%). Meanwhile, 56% of pending orders are to buy the Greenback (+4%).
OANDA traders are bullish on the pair, as 53% of open positions are long on Monday (-6%). In addition, the number of open positions of Saxo Bank clients is 58% long (unchanged from Friday).