- SWFX market sentiment was 59% bearish on Monday morning
- 60% of pending orders in the 100-pip are set to BUY
- No macroeconomic releases until Tuesday
- Economic calendar webinar at 12:00 GMT
During the early hours of Monday's trading session the US Dollar was losing ground against the Japanese Yen until it found support in a new level of significance. Namely, the new weekly pivot point was located at the 110.31 mark and pushed the currency rate higher.
The Bureau of Labor Statistics released Consumer Price Index data that came out in line with a forecast of 0.2%, staying unchanged from the previous period.
"The slow but steady upward pressure on inflation could tilt a majority of policymakers to lift their suggested interest rate forecast," said Sal Guatieri, a senior economist at BMO Capital Markets.
Join for the calendar review
It is a usual empty Monday for macroeconomic data releases. However, it also gives the chance to properly prepare for the rest of the week.
For example, one can join the Dukascopy Analytics weekly economic calendar webinar, which is set to take place at 12:00 GMT on the bank's webinar platform.
USD/JPY could be led by SMAs
USD/JPY was trading sideways on Friday, being restricted by the monthly R1 from above and the 55– and 100-hour SMAs—from below. The pair made a false breakout of the latter early today but nevertheless it had returned above this cluster by Monday morning.The Greenback has diminished its trading range within a two-week ascending channel. This suggests that the pair might breach its lower boundary at 110.20, likewise reinforced by the 61.90% Fibonacci retracement and the 200-hour SMA, and move lower down to a more senior channel and the weekly S1 circa 109.70.
Meanwhile, technical indicators remain bullish for today. Under this scenario, the aforementioned SMAs should guide the pair higher towards the weekly R1 at 111.30.
Hourly Chart
If one looks at the daily chart, there are no surprises. The currency exchange rate clearly bounced off the support of an ascending channel pattern.
The rate is set to slowly but steadily go higher until it eventually reaches the most dominant patterns resistance line near the 111.50 mark.
The most recent move was just a simple rate's bounce off from the resistance of the monthly R1 at the 110.78 mark after a too prolonged surge. Namely, there should be a consolidation period, which is more favoured by the bullish traders than a decline that could trigger trailing stop losses.
Daily chart
Swiss Foreign Exchange market was 59% short on Monday morning. Previously, for a long period Swiss traders were near the neutral zone, as they were either slightly bullish or bearish.
Meanwhile, there are less orders to buy the US Dollar against the Yen, as 54% of all orders were to buy, compared to 57% previously. However, in the 100-pip range that proportion is near 60%.
It seems like all the long positions, which were present on Friday have been terminated on Monday morning, as the currency exchange rate had declined. However, there still exist the set up orders to buy the pair, when it passes the previously mentioned monthly resistance level.
Oanda traders have decreased their long position proportion, as they were 53% long on Monday. On Friday and Wednesday, respectively 56% and 64% of positions were long. This indicates that as a short term decline began, traders began to take profit and/or short the currency exchange rate.
In addition, the proportion of long positions of Saxo bank traders is slightly bullish for the third consecutive trading session with 52% of open positions being long.
Spreads (avg, pip) / Trading volume / Volatility