- 61% of all pending orders are to purchase the Buck
- 70% of traders hold long positions
- Resistance rests around 101.15
- The weekly PP at 100.41 represents immediate support
- 63% of the survey participants expect the US Dollar to cost less than 105.00 yen in three months
- Upcoming events: US GDP Annualized, US Goods Trade Balance, Fed Chair Yellen's Speech, Revised UoM Consumer Sentiment, BoJ Kuroda's Speech
New orders for US manufactured capital goods climbed in July for a second month, fresh figures revealed on Thursday. According to the Department of Commerce, demand for all durable goods rose 4.4% in the reported month, the highest reading since October 2015. Market analysts expected US orders for long-lasting goods to increase 3.4% in July, following last month's 3.9% upwardly revised drop. Excluding transport, orders jumped 1.5% in the same month, compared to June's 0.4% upwardly revised decline and surpassing the 0.4% market forecast. The gain in overall durable goods orders was mainly driven by a 10.5% rise in demand transportation equipment. Orders for civilian aircraft, which are extremely volatile month to month, advanced 89.9% in July, while orders for automobiles remained flat.
Meanwhile, the rise in core durable goods orders follows an increase in oil and gas drilling activity. Other data released on Thursday showed the number of Americans filing for unemployment benefits dropped to 261,000 in the week ending August 20, following last week's 262,000 claims. Economic desks penciled in a slight acceleration to 265,000 in the reported period. This marks 77 consecutive weeks of initial claims below 300,000, the longest streak since 1973. The four-week moving average fell to 264,000 from 265,250 seen in the previous seven days.
US GDP Annualized, Yellen's and Kuroda's speeches
Today important data is due, such as the US GDP Annualized, which shows the monetary value of all goods, services and structures produced within the US in a given period of time. It is a gross measure of market activity, because it indicates the pace at which a country's economy is growing or decreasing. It is the second estimate, thus, the impact will be lesser than that of the preliminary one. Furthermore, probably the most important event today will be Janet Yellen's speech at 14:00 PM GMT. As head of the US central bank, she has more influence over the nation's currency than any other person. Close attention will be paid to her speech and her comments, interpreting them either bearish or bullish towards the US Dollar. The most anticipated insight from her concerns the interest rate hike during today's meeting in Jackson Hole. Tomorrow, however, the BoJ's Governor is also scheduled to speak. His comments will be crucial to further Yen's performance.USD/JPY in limbo ahead of Yellen's speech
During the previous three days the USD/JPY currency pair remained almost completely muted, awaiting for the Fed president to speak today. According to technical studies and other data, Yellen is likely to be dovish, which would lead to another US Dollar sell-off. Moreover, the Buck then risks falling under the 100.00 yen level, with the nearest area to limit the losses being the cluster around 99.45, represented by the weekly S1 and the Bollinger band. A breach of this area would expose the 99.00 mark, as well as the second support area circa 98.70, which is the final obstacle before the Greenback could begin falling towards the descending channel's lower border around 95.50.Daily chart
With the full blow breach of the down-trend, the US Dollar ignored the 200-hour SMA and continued to outperform the Japanese Yen, moving along the up-trend. The support line is now reinforced by the 200-hour SMA, thus, a downside breakout seems unlikely, but fundamental factors could well outweigh the technical ones.
Hourly chart
Bulls remain in the majority, taking up 70% of the market today. Meanwhile, 61% of all pending orders are to purchase the Buck.
Sentiment at Saxo Bank is virtually the same - 73% of the Denmark-based clients are currently holding long positions. Traders at OANDA are slightly less confident in Dollar's appreciation - as many as 71% of open positions are long. Using the data as a contrarian indicator, the sentiment implies a cheaper Dollar. There is little room for new buyers to enter the market, and if the bulls start closing positions on profit-taking, this could create a strong selling pressure.
Spreads (avg, pip) / Trading volume / Volatility
Slightly more than a half expect the exchange rate to fall below 105.00 yen
Slightly more than half of the surveyed (63%) now assume that the US Dollar is to cost less than 105.00 yen after a three month time. The most popular choice, however, implies that the Greenback is to cost between 108.00 and 109.50 yen in three months, selected by 18% of the voters. According to the votes collected between July 26 and August 26, the mean forecast for November 26 is 103.24. At the same time, 12% of the surveyed believe the Greenback could cost more than 109.50 yen in three months.