- SWFX market sentiment is 67% bullish
- Pending orders in the 100-pip range are 60% to SELL
- Minor data after Fed hike
The big event of the week has passed. He Federal Funds Rate announcement has caused an opposite effect to what theory would suggest. Namely, the US Dollar plummeted, as it was revealed that there will be three rate hikes this year not the already fantasized by some four or five hikes.
The US Census Bureau revealed on Friday that the US building permits data did not meet expectations, showing the growth pace of only 1.30M units in February, following the downwardly revised 1.38M reading in the prior month.
The stronger-than-expected fall in the US homebuilding was caused by a plunge in the multi-family housing construction offsetting a rise in single-family projects for the second month in succession.
Unemployment Claims
The main event of the week has occurred, the Fed rate hike has caused the US Dollar to plummet due to the fact that Jerome Powell revealed additional information. Namely, there will be three rate hikes this year. Due to the fact that it was less than already priced in by the markets, the drop occurred.
Meanwhile, watch for the weekly US Unemployment Claims data, which might cause some minor fluctuations in the currency exchange rates. If the bounce is too big, it could trigger some stop losses.
USD/JPY could be guided by fundamentals
The US Dollar has still failed to gain strength against the Japanese Yen, thus lingering slightly above the 2017/2018 low of 105.35.The most recent weakness was caused by trade rhetoric between the US and China which weighted heavily on the pair during the first part of Wednesday. As a result, the US Dollar dashed through the strong support of the 200-, 55– and 100-hour SMAs.
The FOMC policy decision strengthened the bearish pressure, thus pushing the rate down to the 105.60 mark.
The pair is likely to be affected by fundamental events today, such as a tariff announcement by Trump, and is unlikely to move past the 55– and 200-hour SMAs and the weekly PP at 106.30 in this session. Meanwhile, the nearest support is set by the aforementioned low and the weekly S1 circa 105.30.
Hourly Chart
The previously spotted possible long term pattern has been broken by the Federal Reserve's announcement.
Due to that reason the speculated scenario of a surge up to the 107.00 mark is not likely to be fulfilled in the upcoming weeks.
Daily chart
SWFX traders are still on the long side, as 67% of open positions were bullish during the morning hours.
However, trader set up orders remain bullish, as 54% of trader set up orders were to buy the US Dollar in favour to the Japanese Yen.
Meanwhile, the market sentiment of OANDA traders remains strongly bullish with 70% long positions. In addition, Saxo bank traders are 52% bullish in regards to this pair.
Spreads (avg, pip) / Trading volume / Volatility