- SWFX market sentiment is 69% bullish
- Pending orders in the 100-pip range are 63% to BUY
- Minor impact from Unemployment Claims
On Thursday the situation on the USD/JPY chart had changed. Namely, the currency exchange rate had been pushed lower by the 55-day SMA. However, Dukascopy Analysts expected this for a couple of previous trading sessions. In fact, this event confirms the long term speculated assumptions.
The Bureau of Labor Statistics revealed lower-than-expected data in Consumer Price Index in March. On month-to-month basis CPI showed its first decrease in 10 months by 0.1%, compared to a growth of 0.2% in the prior month.
However, economists had forecast it to stay unchanged, the drop was caused by the decline in gasoline costs. Moreover, rising prices for rental accommodation and healthcare continued to put pressure on underlying inflation.
Minor data on Thursday
The main events of the week have passed. The US CPI disappointed swing traders by creating only a ten base point move.
In regards to the rest of the week, there is only one minor event to watch in regards to the USD. Namely, the US weekly Unemployment Claims are set to be released at 12:30 GMT.
Although, experience shows that it is unlikely to cause a notable fluctuation in the financial assets that are traded against the US Dollar.
USD/JPY bounded by SMAs
The US Dollar was pressured by bears on Wednesday which resulted in a breakout of the 55– and 100-hour SMAs early in the session.This fall was stopped by the combined support of the 23.60% Fibonacci line, the weekly PP and the 200-hour SMA circa 106.70. As apparent on the chart, this level has previously provided a significant resistance/support area. Thus, a downward-sloping triangle was confirmed.
By Thursday morning, the pair was squeezed in between the bounds of all these aforementioned levels. It is likely that traders are unable to breach them for some hours. Meanwhile, a breakout should determine the pair's subsequent movement during the day.
Technical indicators favour more a northern breakout of the 107.00 area that should send the Greenback for the 107.20/50 area.
Hourly Chart
On the daily chart one can observe that the main focus is still on the medium term ascending channel pattern, which is aimed in a rather sharp angle upwards. However, the new development is that it has been broken to the downside.
Due to that angle and the range of the pattern, it was already previously assumed that it only represents the first move in the borders of a new long term ascending channel pattern. Namely, expect the formation of a new medium term pattern, which will represent the next move in the borders of a larger pattern.
Daily chart
SWFX traders are still on the long side, as 70% of open positions remained bullish during the morning hours. Moreover, trader set up orders remain unchanged, as 58% 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 67% long positions. In addition, Saxo bank traders are 60% bullish in regards to this pair.
Spreads (avg, pip) / Trading volume / Volatility