- The Swiss market sentiment is 52% bearish
- 57% of pending orders in the 100-pip range are set to SELL
- Minor US data on Tuesday
On Monday, the USD/JPY continued the surge, which the currency exchange rate began on Friday. During the second half of the day's trading the pair had reached above the 111.00 level, where various strong resistance levels were located at. Due to that reason, it was expected that the currency rate was going to continue to surge up to the 111.20 level, where next notable technical levels are located at.
The Bureau of Economic Analysis released the US Prelim GDP data that came better-than-expected. Namely, the GDP grew by 4.2%, compared with the forecast 4.0%. The data release showed that the US currency should be more demanded than previously though.
An analyst at Dukascopy Bank SA comments: "There are three types of GDP releases, released a month apart from each other. The most significant version is called the Advance GDP, which is the most significant against other GDP releases. Prelim GDP is an insignificant release, which doesn't affect the market a lot. This time was not an exception."
US ISM data will cause a small bounce
The only notable event on the calendar for the USD/JPY pair during the first half of this week will be the release of the US ISM Manufacturing PMI at 14:00 GMT on Tuesday. The event is unlikely going to cause a large reaction in the currency markets, as it has caused in the past only moves of around ten pips.
USD/JPY tests monthly pivot point
The USD/JPY was at the 110.96 mark on Monday. The currency exchange rate tested the monthly pivot point at the 111.02 during morning hours. Moreover, the 55-hour and the 100-hour SMAs crossed each other near the weekly pivot point at the 111.22 mark at the same time during morning hours.In regards to the near future, the 55-hour and the 200-hour SMAs will meet each other which will force the US Dollar to go downwards. In addition, there is strong resistance given by the Fibonacci 61.80% retracement level.
Hourly Chart
The previously drawn dominant descending pattern on the daily chart held its ground on Thursday and forced the currency exchange rate lower. The USD/JPY declined in the aftermath of the event and dropped down below the 111.00 level.
In regards to the future, the pair is set to soon begin the formation of a descending pattern and go down to as low as 109.00 in the upcoming month. However, note the various daily simple moving averages, monthly and weekly pivot points that will pause the fall of the USD/JPY and cause short surges upwards.
Daily chart
The Swiss Foreign Exchange retail trader sentiment remains almost neutral. On Monday, 52% of trader open positions were short.
Meanwhile, trader set up pending orders are no longer neutral. Namely, 54% of all Dukascopy traders are preparing to sell the USD/JPY. This strengthens the hypothesis of an upcoming decline.
58% of Saxo Bank traders are long today. Meanwhile, OANDA traders are almost neutral, as the brokerage's clients are 53% long.
Forex market participants are still mostly neutral in regards to the pair. However, it can be noticed that a decline might begin soon, as retail sell orders are dominating.
Spreads (avg, pip) / Trading volume / Volatility