- SWFX market sentiment is 60% bearish (+1%)
- 63% of pending orders in the 100-pip range are to SELL
- Significant resistance is found near 113.00
- Upcoming events: US Building Permits, US Housing Starts
The Labour Department revealed that the US consumer inflation eased to 0.1% from 0.5% in October, while its core figure appreciated to 0.2% in the same period.
Relatively strong readings pointed to the end of dis-inflationary trend, which worried the Fed the most. The report also showed a little slowdown in retail sales growth pace, though stronger consumers spending, including higher real wages and job gains are expected to encourage retailing in the next months.
US Building Permits
The first part of this session will be calm in terms of fundamentals. The only two sets of data that are to be released today are the US Building Permits and Housing Starts for the month of October at 1330GMT.
USD/JPY forms falling wedge pattern
As it was expected, the currency exchange rate made a rebound from combined resistance formed by the monthly PP and the falling 55- and 100-hour SMAs. However, fears over impact of the new US tax reform that was passed by the House last night led to sharp apperception of all safe have assets, including the Yen.On the one hand, lower support line of the currently active descending channel sustained the bearish pressure. On the other hand, inability of the rate to break to the top three days in a raw points out on transformation of this pattern into the falling wedge formation.
In any case, a sudden breakout to the north is not expected due to development of another resistance barrier consisting from the falling 55-hour SMA and the weekly S1.
Hourly chart
The US Dollar continues to push lower against the Yen for the third consecutive week. On Wednesday, the pair halted at the weekly S1 at 112.86 – a level that allowed for a slight daily recovery on the following day. However, the bearish sentiment prevailed once again this morning when the US Dollar moved past this weekly pivot point and edged towards the 55-day SMA at 112.33.
It is possible that the rate fluctuates between this level and the monthly PP in the 112.33/113.25 area during the day.
Daily chart
The bearish SWFX sentiment has strengthened in this session, as 60% of traders are holding short positions (+1%). In addition, 51% of pending orders is to sell the US Dollar.
The bearish market sentiment prevails for OANDA traders, as well, as 53% of open positions are short for the second consecutive session. Meanwhile, the number of open positions of Saxo Bank clients is 53% long (unchanged from Thursday).