- Pending orders at equilibrium on Thursday
- 55% of all open positions are short
- The nearest significant resistance is around 113.94
- Downside potential down to 112.95
- Upcoming Events: US ADP Non-Farm Employment Change, US Unemployment Claims, US Trade Balance, US ISM Non-Manufacturing PMI
New orders for US-made goods declined more than estimated for the second consecutive month in May, a worrisome sign for the manufacturing industry. The US Commerce Department reported on Wednesday that the country's factory orders dropped 0.8% month-over-month in May, following a downwardly revised 0.3% fall registered in April. Meanwhile, analysts anticipated new orders to show a smaller decline of 0.5%. On a yearly basis, factory orders were up 4.8%, suggesting that US manufacturing activity continued to expand at a moderate pace. Excluding transport, orders plunged 0.3% in the reported month after being flat in April.
Moreover, the report showed that orders for non-defence aircrafts dipped 11.6%, following a 12.2% decline in the previous month. Overall, factory data marked slow growth amongst most industry sectors without any signs of a sustained expansion. Mixed US macroeconomic reports called to question the US economy's ability to achieve Trump's ambitious targets. However, despite sluggish inflation and economic growth the Fed left the third interest rate hike on the table.
Day full of fundamentals from US
The United States are to release various sets of data in this trading session. The series will start with ADP Non-Farm Employment Change at 1215 GMT. Subsequently, unemployment claims and trade balance are to be published at 1230 GMT. The last significant event is the ISM Non-Manufacturing PMI at 1400 GMT.
USD/JPY unchanged from Wednesday
The US Dollar appreciated strongly against the Yen on Wednesday morning, reaching intraday high circa 113.60. Nevertheless, it had lost most of its gains by late evening and, thus, started this session at a relatively similar level as yesterday. Subsequently, the rate was supported by the 100-hour SMA near the 112.94 mark prior to testing a resistance cluster formed by the 20– and 55-hour SMAs. It is possible that the rate approaches the monthly R1 at 113.94 in the upcoming hours. However, the rate's general movement sideways during the past three sessions suggests that some changes may occur in the nearest time. In general, the rate is likely to remain within the boundaries of the current channel if today's fundamentals from the US do not change this technical information substantially.Hourly chart
The Greenback faces a significant support cluster formed by the 100-, 55, 200- and 20-hour SMAs and the monthly PP in the 111.00/112.00 area. Meanwhile, gains may be capped near the monthly R1 at 113.94.
Daily chart
SWFX market sentiment is bearish, as 55% of all open positions are short, compared to 56% on Wednesday. Meanwhile, pending orders are at equilibrium, thus demonstrating trader indecision.
Traders at OANDA remain bullish on the US Dollar, as 55% of open positions are long. Meanwhile, Saxo Bank clients are bearish, with 53% of open positions being short.
Spreads (avg, pip) / Trading volume / Volatility
Traders remain bullish on US Dollar
Traders expect that the US Dollar may appreciate up to the 113.53 mark against the Yen in three months' time (113.73 on Wednesday). 60% of all forecasts fall above the current spot price which is located near the 113.35 mark. The majority of voters expect the US Dollar to cost somewhere between 114.00 and 115.50 yen in early October, with 26% of survey participants choosing this trading range (+1%).