- SWFX market sentiment is 61% bearish (+1%)
- Pending orders in the 100-pip range stand at equilibrium
- Strong resistance around 113.30
- Upcoming events: US CB Consumer Sentiment and Pending Home Sales m/m
The Federal Reserve of Richmond released its survey, showing that the manufacturing growth was slower over the month of December.
The Manufacturing Index dropped to 20 from 30 in the reported month, being an additional sign for the Fed to keep interest rate hike plans in 2018. Meanwhile, markets remained cautious ahead of the New Year, with the US Dollar taking less attractive stand, which could be sustained until the Fed's new President Powell takes the position.
US Consumer sentiment
The US Conference Board Inc. is to release its Consumer Confidence at 1500GMT. The US Pending Home Sales for the month of November will be published at the same time.
USD/JPY prepares to test weekly PP
In line with expectations, first half of the previous trading session the currency rate spent in a limbo between the 55- and 100-hour SMAs and then slipped to the weekly PP at 113.10.It appears that this movement confirmed existence of a new minor descending channel. If this assumption is true, then the rate is expected to make another attempt to test the above support barrier.
The positive sentiment on the buck points out on a new rebound. However, the additional pressure from two moving averages might help to push it lower. But even if this scenario materializes, the plunge should not exceed the 113.00 level, as it is secured by the 200-hour SMA and the 50% Fibonacci retracement level.
Hourly chart
As apparent on the chart, the US Dollar has depreciated against the US Dollar for the last four trading sessions.
The same bearish sentiment prevailed on Wednesday morning, as well, thus moving the rate closer to the weekly PP at 113.10. It is likely that this support barrier holds the rate in this session and could even do so until the end of this week.
Daily chart
SWFX market sentiment is bearish, as 61% of open positons are short (+1%). Meanwhile, 56% of pending orders are to buy the American Dollar (+3%).
OANDA traders are bearish on the pair, as they are holding 55% short positions in this session (+2%). Saxo Bank clients are also bearish with 55% short positions (+1%).