- 57% of all pending orders are to buy the US Dollar
- 54% of all open positions are long
- The nearest significant resistance is around 111.80
- Downside potential down to 111.08
- Upcoming events: US Core Durable Goods Orders m/m, Durable Goods Orders m/m
The number of Americans filing for unemployment benefits rose slightly last week, official figures revealed on Thursday. The US Department of Labour reported that initial jobless claims rose to 241K in the week ended June 16, following the preceding week's upwardly revised 238K but meeting market analysts' expectations. Initial claims remained below the 300K level for the 120th week, the longest streak since 1973. The four-week moving average of initial jobless claims climbed 1.5K to 244,750 last week, the highest level since April.
Apart from that, Thursday's data also showed that the number of people continuing to receive jobless benefits rose 8K to 1.94M in the week ended June 10. Continuous claims remained below the 2M level for 10 consecutive weeks, pointing to the strong labour market trends. According to some analysts, the US labour market is at or close to full employment, with the unemployment rate at a 16-year low of 4.3%. If the jobs market continues to perform strong, the Fed will likely speed up interest rate hikes. However, to make the next rate hike policymakers will also focus their attention on inflation growth.
US to release Core Durable Goods m/m
The most significant fundamental events for this trading session is a set of data on US Durable Goods Orders at 1230 GMT of which the greatest importance is put on Core Durable Goods Orders, as they might shake the market considerably.
USD/JPY demonstrates potential up to 111.80
On Friday, a lack of strong market movers put USD/JPY in a small trading range in the 111.20/40 area. The pair was stopped several times by the 20– and 55-hour SMAs, restraining a move above the 111.30 mark. In this session, however, the US Dollar passed the both SMAs to test the upper channel boundary. It is likely that the American currency breaks the given line and appreciates against the Yen, as the sideways momentum demonstrates mitigated downside risks. By and large, upside potential may be realised up to the monthly PP at 111.80. The downside limit may be provided by a support cluster formed by the 55– and 200-day SMAs apparent on the daily chart circa 111.00. Meanwhile, the US is to release m/m durable goods orders at 1230 GMT that may provide upside pressure on the pair.Hourly chart
As apparent on the daily chart, USD/JPY is stranded between two clusters. From the upside, the US Dollar might meet considerable resistance formed by the monthly PP and the 100-day SMA at 111.80. On the other hand, support is provided by the 55- and 200-day SMAs in the 111.08/110.97 area. In case no fundamentals affect the market significantly, the pair should remain in the given range.
Daily chart
Traders remain bullish on the pair, as 54% of all open positions are long in this trading session. Meanwhile, 57% of pending orders are to buy the Greenback.
OANDA clients are even more bullish with 61% long positions, compared to 60% on Friday. Additionally, trader sentiment at Saxo Bank has likewise increased, with 58% of all positions being long (57% on Friday).
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
Traders expect that the US Dollar is to appreciate up to the 113.34 mark against the Yen in three months' time. It is worth noticing that 59% of all forecasts fall above 112.50 yen, which is below the current spot price. The majority of voters expect the US Dollar to cost somewhere between 114.00 and 115.50 yen in three months, with 17% of survey participants choosing this trading range. Furthermore, the 108.00-109.50 and the 118.50-120.00 ranges were the second most popular ones with 14% of the votes.