- The portion of orders to sell the Buck fell to 54%
- 56% of traders hold short positions
- Immediate resistance lies around 118.26
- The closest support rests around 117.13
- Upcoming events: US Markit Services PMI, BoJ Monetary Policy Statement
Both building permits and housing starts dropped more than expected last month, suggesting that the Q4 growth rate could be possibly revised downwards. According to the US Department of Commerce, new-home construction fell 18.7%, the biggest decrease in almost two years, to a seasonally adjusted annual rate of 1.09 million units in November, while market analysts anticipated a slight deceleration to 1.23 million during the reported period. Housing starts tend to be volatile on a monthly basis. Meanwhile, the October figure was revised up to a 1.34 million-unit pace, the highest level since July 2007, from the originally reported 1.32 million. The Commerce Department also reported that building permits declined 4.7% to an annualized rate of 1.20 million units, following October's upwardly revised reading of 1.26 million, whereas economists expected them to decrease to a 1.24 million-unit pace.
Nevertheless, the National Association of Homebuilder's sentiment measure, released on Thursday, jumped to 70 points in December, the highest level in 11 years, compared to the previous month's figure of 63. December's increase was driven in large part by Donald Trump's surprise victory in the US presidential elections last month.
US Markit Services PMI is the only event today
Monday is rich with only one event that could have some impact on the USD/JPY, namely the US Markit Services PMI. It captures business conditions in the services sector. As the services sector dominates a large part of total GDP, the Services PMI is an important indicator of the overall economic condition in the US. Another event to influence the given pair will be the BoJ Monetary Policy Meeting, which is due early on Tuesday. The Yen will be expected to weaken, but not dramatically.USD/JPY on the edge of sliding back under 117.00
Friday ended with the USD/JPY currency pair experiencing a small setback in its bullish trend. After rallying more than 200 pips during the previous week the given pair now has sufficient room for a decline or two. The weekly pivot point now represents immediate support at 117.13, but the up-trend rests at the 116.00 major level, also being bolstered by the weekly S1. The trend-line is the main target, as the US Dollar is likely to keep falling due to investors taking profit from the recent rallies. Technical studies, however, are unable to confirm this outlook, as they keep giving bullish signals.Daily chart
The USD/JPY currency pair appears to be undergoing a corrective decline after having rallied last week. The 117.00 major level is providing some support, preventing the pair from reaching the up-trend for the time being, but it is uncertain whether bulls will be able to keep the Buck elevated.
Hourly chart
There are 56% of traders holding short positions today, whereas the portion of orders to sell the Buck lost three percentage points, having fallen to a total of 54%.
Meanwhile, there has been an increase in the number of long positions at other brokers. Right now 56% of OANDA clients are bears, compared to 53% on Friday. In the meantime, Saxo Bank clients are slightly on the bearish side, being that the portion of shorts takes up 51% 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 19 and December 19, traders expect the US Dollar to appreciate to 115.45 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 64% of all forecasts fall above 114 yen, which is close to the current spot price. The majority of people voted expect the US Dollar to cost somewhere between 117.00 and 118.50 yen in three months, with 15% of the survey participants choosing this trading range. Meanwhile, the second most popular intervals are the 118.50-120.00 and the 120.00-121.50 ones, with 12% of the votes each, also followed by the 112.50-114.00 and the 115.50-117.00 intervals, chosen by 10% of all the surveyed.