- SWFX market sentiment is 53% bearish
- 65% of pending orders in the 100-pip are to BUY
- US Retail Sales at 12:30 GMT
Tuesday morning saw the US Dollar testing the resistance trend line against the Japanese Yen, which held its ground. However, it could have been observed that from a larger scale perspective the resistance was about to be broken.
The Bureau of Labor Statistics released two datasets simultaneously from which Consumer Price Index came out lower-than-expected of 0.2%, compared to negative 0.1% in the previous period. Similarly, Core Consumer Price Index too came out lower-than-expected of 0.1%, compared to 0.2% in the previous month.
The Department of Labor released Unemployment Claims data at the same time, which came out better-than-expected of 211K.
The week begins on Monday for macro traders
Monday showed an empty trading session for macroeconomic data release caused swing traders. However, our regular readers joined the webinar, which looked at the rest of the week and analysed this week's events. The webinar can be accessed here.
Meanwhile, on Tuesday the first notable event of the week, which might impact the strength of the US Dollar, is set to occur. Namely, the US Retail Sales and US Core Retail Sales will be published at 12:30 GMT.
The data release will be covered by the Dukascopy research team's analysts at 12:20 GMT.
USD/JPY tests trend-line
Despite facing strong resistance of the 55-, 100– and 200-hour SMAs near 109.40, bulls managed to gather enough strength to push USD/JPY above this level on Monday. This breakout provided additional bullish momentum, as the US Dollar subsequently surged as high as the 109.90 mark where a two-week trend-line is located.The following hours will be important to determine the pair's further direction. A successful breakout of this level should result in further appreciation up to the 110.20/40 area where the 61.80% Fibonacci retracement is located.
On the other hand, a bearish reversal is expected to result in a test of the aforementioned SMAs and the weekly PP near 109.50. A decline below this area is not expected to follow.
Hourly Chart
The previous assumptions made from the daily chart have become reality. The currency exchange rate tested the 110.00 mark on Tuesday for the third consecutive time in May.
Although the pair has bounced off the resistance, it is still expected that the currency pair will break above the strong resistance cluster, which begins at 110.00 and lasts up to 110.20 levels.
Daily chart
SWFX traders are bearish on the US Dollar, as 53% of open positions were short during the morning hours. Trader set up orders are bullish with 60% of them being set to buy the Greenback.
The market sentiment of OANDA traders is strongly bullish with 58% of them holding long positions. In addition, the number of long positions of Saxo bank traders is 56%.
Spreads (avg, pip) / Trading volume / Volatility