- SWFX market sentiment is 72% bullish (-2%)
- Pending orders in the 100-pip range are 52% to SELL
- The usual employment release and FOMC
Due to the recent decline of the currency exchange rate the situation has been remapped. The most notable fact in the newly drawn hourly chart is the fact that the pair has bounced off a long term resistance. This suggests a continuation of the decline of the buck against the Yen in the near future.
The US National Association of Realtors reported that in January the existing home sales slumped for the second month in a row. Contrary to economists' expectations for the number to have surged 0.9%, existing home sales declined 3.2% in the reported month.
It was the largest drop on year-to-year basis over the three-year period. Yet, the demand for housing is increasing due to the boosting labor market, which results as a shortage of buying opportunities for some potential first-time buyers.
Events that might surprise
By looking at what is left for this week in regards to data releases that might cause fluctuations, two events can be noticed. However, both of them could cause a reaction only if they significantly differ from the forecasts.
Namely, on Thursday watch out for the US Unemployment Claims at 13:30 GMT. On Friday watch the various FOMC member speeches, which are set to occur in the second part of the day. To be exact at 15:15 GMT Dudley speaks, at 18:30 GMT Mester gives a speech, and at 20:40 GMT Williams will express his views.
USD/JPY strongly bearish today
Downside risks dominated USD/JPY on Thursday, as the pair closed the session with a 100-pip fall. Along the way, some significant support levels, such as the 55-, 100– and 200-hour SMAs, the monthly S1 and the weekly PP, were breached.By Friday morning, the rate had returned near the 107.15 mark to re-test the longer-term moving averages. However, technical indicators flash strong sell signals, especially given the strength of the nearest resistance. Thus, traders might fail to see a test of the senior channel circa 107.50 today.
If looking at the nearest support, no southern barriers are restricting the pair until the 105.65 mark where the lowest point since November 2016 is located. In case bears prevail, the Greenback is unlikely to move below this level.
Hourly Chart
After the recent review of the pair it was discovered that the daily chart's channel down pattern is better drawn by tilting it a little bit to the downside.
If one draws the channel like that, he can notice that the pair has already confirmed the upper trend line of the channel down pattern. Moreover, the supports near the 107.00 mark are already serving as resistance. Due to that reason expect a decline down to the 104.00 mark during the upcoming months.
Daily chart
SWFX traders are on the long side, as 72% of open positions were bullish during the morning hours. In addition, 54% (-6%) of pending orders are to buy the Greenback.
Meanwhile, the market sentiment of OANDA traders remains strongly bullish with 63% long positions. In addition, the Saxo Bank's published market sentiment is 59% long
Spreads (avg, pip) / Trading volume / Volatility