- SWFX market sentiment is 68% bearish (+1%)
- 51% of pending orders in the 100-pip range are to BUY
- Significant resistance is found near 113.50
- Upcoming events: US CPI and Core CPI m/m, Retail Sales and Core Retail Sales m/m, US Empire State Manufacturing Index
The Labour Department revealed that the US Producer Price Index increased 0.4% over the month of October, surprising expectations for a weaker gain of 0.1%.
The surge was driven by a rise in the cost of services. In addition, data showed steady acceleration in underlying produced prices, which encouraged projections for a gradual inflation growth and kept the Fed on track to make the interest rate hike in December.
US Consumer Price Index
Wednesday's trading session is reserved solely for US fundamentals. The country is to release its (Core) CPI and (Core) Retail Sales for the month of October, as well as the Empire State Manufacturing Index at 1330GMT.
USD/JPY heads towards 113.00
As it was expected, the currency exchange rate failed to climb above combined resistance formed by the 200-hour SMA and the weekly PP at 113.80. This rebound as well as release of positive Japan's quarterly GDP data led to a breakout from recently formed ascending channel.As the currency rate crossed not only the 55- and 100-hour SMAs but also the monthly PP at 113.25, the pair is expected to continue heading to the bottom towards an alleged support zone near the 112.98 mark.
The fact that the rate is also fluctuating in a general downtrend suggests that it should succeed to sneak below the 113.00 level. However, whether this assumption materializes will heavily depend on release of the American retail sales and inflation data.
Hourly chart
The market sentiment changed from neutral to bearish on Tuesday, as the pair was moving away from the 20-day SMA. This suggests that the US Dollar could reach for the lower Bollinger band located circa 112.80.
Given the strong bearish momentum apparent early in this session, the given line is located nearby. However, downside risks might still prevail during the following session or two.
The current trading range for the pair is between the weekly PP and S1 in the 113.80/112.86 area.
Daily chart
SWFX market sentiment has strengthened by one percentage point in this session, as 68% of traders are holding short positions (+1%). Meanwhile, 51% of pending orders are to sell the US Dollar.
The bearish market sentiment prevails for OANDA traders, as 54% of open positions are short (-1%). Meanwhile, the number of open positions of Saxo Bank clients is 51% long (-2%).