- SWFX market sentiment is 55% bearish (-2%)
- 54% of pending orders in the 100-pip range are to BUY
- Nearest resistance is located near the 111.40 mark
- Upcoming events: Speeches by FOMC Members Harker and Dudley, Fed Chair Designate Powell and Treasury Secretary Mnuchin, US CB Consumer Confidence
Sales of new single-family homes in the US marked solid increase to reach a ten-year high due to robust demand throughout the country, providing a boost to the property market.
The Commerce Department showed that new home sales rose 6.2% to a seasonally adjusted yearly rate of 685K in October, the highest level in ten years. Moreover, upbeat results indicated that housing kept gaining momentum after the lack of available properties and suitable land restrained the growth.
Session full of speeches
Four speeches are scheduled for this session. The President of the Federal Bank of New York William Dudley is due to deliver opening remarks at the annual conference on the evolving structure of the US treasury market, while the President of the Federal Bank of Philadelphia Patrick Harker is to speak about financial safety for the aging population at 1415GMT and 1515GMT, respectively.
Meanwhile, the Federal Reserve Chair Designate Jerome Powell is to testify on his nomination as the Federal Reserve Chief before the Senate Committee on banking, Housing and Urban Affairs at 1445GMT, as well as the US Treasury Secretary Steven Mnuchin will participate at the annual conference on the evolving structure of the US treasury market at 2045GMT.
The only data release today is the US Consumer Confidence published by the Conference Board Inc. at 1500GMT.
USD/JPY approaches combination of MAs
After making a rebound from the upper edge of the currently active descending channel, the pair slipped through the 38.2% Fibonacci retracement level and landed on the weekly S1 at 110.84. As early hours of the current trading session did not bring any significant news, the pair made a rebound and approached the upper trend-line for the second time.As the boundary is secured by the falling 55- and 100-hour SMAs, it is unlikely that bulls will manage to break the pattern. On the other hand, a reaction on various events in the United States might lead to short-term spike to the 111.60 level.
However, even in case this scenario materializes, the general downtrend should not be affected due to resistance formed by the 100- and 200-day SMAs that are explicitly seen on daily chart.
Hourly chart
The US Dollar showed high volatility on Monday, as it managed to test both the combined resistance of the 100- and 200-day SMAs and the 38.2% Fibo from above and the weekly S1 from below. The bearish sentiment, however, took the upper hand as a result of which the pair ended the day with a 43-pip loss.
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 decreased slightly on Tuesday, as 55% of open positions are short (-2%). Meanwhile, 60% of pending orders are to buy the Greenback (+4%).
OANDA traders are bullish on the pair, with 56% of open positions being long in this session (+3%). In addition, the number of open positions of Saxo Bank clients is 57% long (-1%).