- Pending orders in 100-pip range from the current market price have narrowed once again (52% bullish / 48% bearish)
- The pair could climb in price, with the closest resistance at 119.38
- The downward movement is still possible, but should be limited by the weekly S1 and monthly PP at 116.91/75
- Upcoming events: BOJ Monetary Policy Statement and Press Conference
The number of Americans seeking first-time unemployment benefits declined last week and remained near the lowest level in 14 years, the latest sign of strengthening labour market. Jobless claims fell by 6,000 to 289,000 in the week ended December 13, the fewest since early November, a Labor Department report showed. New applications for unemployment benefits have stayed below the 300,000 threshold in 13 of the past 14 weeks, the longest such streak since the first half of 2000. The four-week moving average, which irons out volatile weekly data, declined by 750 to 298,750. Meanwhile, companies continue to hire more workers and job creation is set for the best year since 1999. The American economy added a seasonally adjusted 321,000 new jobs in November, a separate report showed earlier this month, while the jobless rate was at 5.8%.
Meanwhile, Japan logged its 29th consecutive trade deficit in November despite a slight decline of imports due to the recent fall in crude oil prices. The unadjusted gap in trade widened to 891.9 billion in November from the October's revised 736.9 billion yen shortfall. The seasonally-adjusted trade deficit narrowed slightly to 925.0 billion yen from the revised 985.1 billion yen. Japan's exports rose for a third consecutive month in November from the previous year, but much more slowly than projected and despite a sharp plunge in the Japanese Yen as weak demand in Asia and Europe dampened trade. Exports surged 4.9%, largely on shipments of electronic components, optical equipment and machinery, whereas volume was still down 1.7%.
No major data released on Friday
If yesterday was a day with many releases and with the Japan's monetary policy statement and BOJ press conference then today there is almost nothing to watch. Moreover, this is one of the few days when there are no releases from US.
USD/JPY continues to challenge 119.38
At the first half of the year USD/JPY was trading almost completely flat, as it traded around the 102 level. However, at the second part of August the Greenback started to outperform the Japanese peer rather heavily. A few weeks ago the pair breached the 120 mark and for the time being it remains a target for the pair's bulls since the Greenback has slipped below it. Nonetheless, if traders' fail to breach this substantial level then it is likely to trade around 118/119 levels.Daily chart
The USD/JPY cross has not changed much since yesterday, as it continues to challenge the weekly PP at 119.38. Most likely the pair will have the strength to test the major level at 120; however if not, then there is a risk of the pair falling towards the weekly S1 and monthly PP at 116.91/75 once again. At the mean time, the weekly technicals point upwards.
Hourly chart
Open positions neutral, while pending orders positive
Concerning the orders placed 100 pips from the spot, there are now significantly less commands to sell— 52%. It implies that, if USD/JPY rebounds, in the near-term it may be stopped by the weekly PP and possibly it could push the pair lower.
However, if the pair continue to retreat, most likely it will be stopped by the weekly S1 and monthly PP 116.91/75.
Spreads (avg,pip) / Trading volume / Volatility
Community expects Yen to appreciate towards 120
Likerty, one of the community members participating in the survey, anticipates the pair's moves to be determined by the major 118.70 level "118.70 is a major technical level derived from historical range, so comebacks from above could be possible. 122.50's is a pivotal level of it's upcoming range-deep bearish corrections may fallow."
Meanwhile, traders, who were asked regarding their longer-term views on USD/JPY between Nov 11 and Dec 11 expect, on average, to see the currency pair at 121.20 by the mid-March. However, the largest portion of participants, namely 15% of them, believe the exchange rate will gain either to 121.50/123.00 or 124.50/126.00 in sixty days. Only 25% expect the USD/JPY cross to slide below the current market value.