- SWFX market sentiment is 62% bearish (+2%)
- 54% of pending orders in the 100-pip range are to SELL
- Significant resistance is located at 113.90
- Upcoming events: US Core PCE Price Index m/m, US Personal Spending m/m, Japan's Monetary Policy Statement, BOJ Outlook Report, BOJ Policy Rate, BOJ Press Conference
The Commerce Department revealed that the US gross domestic product marked a 3.0% yearly growth pace in the third quarter, fuelled by higher business investment, while consumer spending growth eased slightly as incomes were hurt by hurricanes.
Separate report showed that the US consumer sentiment remained at lofty levels over the course of October and was expected to improve further. Meanwhile, economists anticipate the Fed to raise rates one more time in December.
BOJ Policy Statement
Only two sets of data are scheduled for this session both of which are of intermediate importance. The US Bureau of Economic Analysis is to release its Core CPE Price Index and Personal Spending for the month of September at 1230GMT.
Meanwhile, the Bank of Japan is to release its Monetary Policy Statement, Outlook Report and Policy Rate early on Tuesday; the time, however, remains tentative. BOJ Press Conference is to be held at 0630GMT.
USD/JPY approaches 113.80
New trading week the currency rate stared in a limbo between the 200-hour SMA from the bottom and a combination of the weekly PP, the 55- and 100-hour SMAs from the top.Such neutral movement reflects anticipation of the Bank of Japan Policy Rate announcement. But since there is high probability that the central bank will left the monetary policy unchanged, the pair is not expected to act unpredictably.
Such assumption is partially supported by presence of two extremums, which have already forced the rate to make a rebound more than once. The first is located near the 114.30 mark, while the other at the 113.34 level.
A breakout through one of these barriers is likely to follow after the FOMC Statement, which will be delivered on Wednesday.
Hourly chart
As expected, the US Dollar is gradually moving towards the lower wedge boundary located circa 113.50. This suggests that this mark might be breached either in this session or tomorrow, thus paving the way for a medium-term decline.
The rate is currently stranded between the weekly PP and the S1 at 113.79 and 113.14, respectively.
Daily chart`
SWFX market sentiment remains bearish early in this week, as 62% of traders are holding short positions (+2%). Meanwhile, pending orders remain at equilibrium (unchanged from Friday).
Traders at OANDA are increasingly bearish on the pair, as 57% of open positions are short (+2%). Meanwhile, Saxo Bank clients are still bearish with 52% short positions (+1%).