- The portion of orders to purchase the Buck remains at 52%
- 60% of traders have a negative outlook towards the Greenback
- Immediate resistance lies at 115.14
- The closest support rests around 113.75
- Upcoming events: US Preliminary Reuters/Michigan Consumer Sentiment, US Wholesale Inventories,
The number of Americans filing for unemployment benefits dropped from five-week highs last week, official figures revealed on Thursday. According to the US Department of Labor, initial jobless claims fell to 258,000 in the week ending December 2 after rising to 268,000 in the preceding week. That was in line with analysts' projections. Initial claims remained below the 300,000 level for the 92nd straight week, the longest streak since 1973. Meanwhile, the four-week moving average of claims, which is considered a better measure of labor market trends, advanced 1,000 to 252,500 in the reported period. Many economists believe the US economy is at or near full employment, with the unemployment rate at 4.6%.
Thursday's report also showed that the number of so-called continuing claims decreased 79,000 to 2.01 million during the week ended November 26, while their four-week moving average dropped 9,5000 to 2.03 million. The Federal Reserve is widely expected to raise its key interest rate by 25 basis points at its two-day policy meeting next week. The last time the Fed increased its benchmark overnight rate was in December last year, when the rate was increased from 0.25% to 0.5%. After the release, the US Dollar rose against other major currencies.
Uneventful end of the week
There are no events that are expected to have a strong impact on the USD/JPY pair's performance today, thus, attention should be paid to the Japanese Core Machinery Orders, which are due early on Monday. They are the total value of machinery orders places at major manufacturers in Japan. They are legally binding contracts between consumers and producers for delivering goods and services. The report is considered the best leading indicator of business capital spending, and increases are indicative of stronger business confidence and therefore, as larger the number is, the positive it tends to be for the currency, while a negative reading is understood as a drop down in growth. Furthermore, the US Monthly Budget Statement is due on Monday. It summarizes the financial activates of federal entities, disbursing officers, and Federal Reserve Banks. A positive budget statement that receipts exceed budgetary outlays is seen as bullish for the USD, while a negative figure that indicates government debt is seen as bearish.USD/JPY takes another shot at 114.50
The US Dollar surprised with its performance on Thursday, as it inched higher against the Japanese Yen unexpectedly. As a result, the pair managed to climb over the 23.60% Fibo, which now suggests that more bullish momentum could follow. Even though technical indicators are also in favour of the positive outcome, the 114.50 psychological level should be considered as a potential resistance, as it prevented the Buck from edging higher on several occasions last week. Meanwhile, the nearest resistance rests only at 115.14, represented by the weekly R1.Daily chart
Fortunately for the US Dollar, the 200-hour SMA successfully triggered a rebound yesterday, causing the Buck to appreciate against the Yen. The USD/JPY keeps gaining ground now, with no significant resistance on the way, with exception of the 114.50/114.60 area, as the pair failed to climb above this zone previously.
Hourly chart
There are now 60% of traders with a negative outlook towards the Greenback, compared to 62% yesterday. The portion of orders to purchase the Buck, however, remains unchanged at 52%.
Meanwhile, there has been a decrease in the number of long positions at other brokers. Right now 60% of OANDA clients are bears, unchanged since Thursday. In the meantime, Saxo Bank clients also remain slightly on the bearish side, being that the portion of shorts takes up 54% of the market.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar
According to the poll that gathered forecasts between November 08 and December 08, traders expect the US Dollar to appreciate to 111.58 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 71% of all forecasts fall above 108 yen, which is close to the current spot price. The majority of people voted expect the US Dollar to cost somewhere either between 111.00 and 112.50 or between 117.00-118.50 yen in three months, with 13% of the survey participants choosing these trading ranges each. Meanwhile, the second most popular interval is the 112.50-114.00 one, with 10% of the votes, also followed by the 105.00-106.50, 109.50-111.00, 114.00-115.50 and 115.50-117.00, each chosen by 8% of all the surveyed.