- SWFX market sentiment is 70% bullish
- Pending orders in the 100-pip range are 51% to SELL
- Another ISM PMI
In general, the USD/JPY pair has continued its decline. However, on Monday morning the rate traded sideways. Meanwhile, a full review of the smaller scale has been conducted.
The ISM Manufacturing PMI release presented a stronger-than-anticipated data, causing a further Dollar strengthening.
The ISM stated that the US Manufacturing PMI increased from 59.1 in January to 60.8 in February, representing the highest mark since May 2004. The US manufacturing activity strengthened in the reported month mainly due to expending exports that are showing their highest growth rate since April 2011.
In fact, growing employment rate also was one of the factors driving the overall expansion in the domestic manufacturing sector.
This week's events
In regards to Monday the US ISM Non-Manufacturing PMI might cause fluctuations in the USD/JPY currency pair. The data is set to be published at 15:00 GMT. However, it will not be covered by the Dukascopy Research team, as little to no reaction is expected.
During the rest of the week markets will concentrate on the US labour data, which will be released with the ADP payrolls on Wednesday, and official employment data on Friday. These data releases will be covered by the Dukascopy research team on the bank's live webinar platform.
However, the most notable event, which is set to affect the USD/JPY pair, will be the publication of the BOJ Policy Rate, the Monetary Statement and the following Bank of Japan's press conference on Friday.
USD/JPY flashes mixed signals
Following an unsuccessful test of the 55-, 100– and 200-hour SMAs mid-Thursday, the US Dollar managed to maintain its southward movement during the following session, as well.Even though the first part of the day marked a 93-pip fall against the Yen, bulls managed to equalise their positions later in the session, thus entering a short period of consolidation.
Technical indicators still flash bearish signals, suggesting that the rate should move towards the weekly and monthly S1s and the bottom boundary of a senior channel circa 104.70. However, some bullish momentum should soon take over the market, thus sending the pair towards the 106.20 area and eventually even higher.
If the Greenback fails to edge lower during the following hours, this might be an early indication of a possible surge north.
Hourly Chart
As there have been more than one adjustment to the long term descending pattern. It can be stated that there might be bias at play from a technical perspective.
Namely, due to the couple of variations of how the pattern can be drawn, there are fluctuations in various descending patterns, depending on who is at play in the market at the time. However, the trend is still downwards aimed in most long term scenarios.
Daily chart
SWFX traders are on the long side, as 71% of open positions were bullish during the morning hours. In addition, 61% of pending orders are to buy the Greenback.
Meanwhile, the market sentiment of OANDA traders remains strongly bullish with 71% long positions.
Spreads (avg, pip) / Trading volume / Volatility