- 77% of all pending orders are to purchase the Greenback
- 63% of traders hold long positions
- A number of important levels form resistance around 102.00
- The closest support rests around 101.58
- Upcoming events: US ADP Non-Farm Employment Change, US Trade Balance, US ISM Non-Manufacturing PMI, US Factory Orders, US Crude Oil Inventories,
Manufacturing activity in the United States rebounded in September after a disappointing August report, official data showed on Monday. The Institute for Supply Management said its Index of manufacturing activity advanced to 51.5 in September, following the previous month's 49.4, while market analysts pencilled in a 1.0 point-acceleration to 50.4 in the reported month. Back in August, manufacturing output contracted for the first time since February of this year, as only six out of 18 industries reported growth. A number below 50 points indicates contraction in the US manufacturing sector, while a number above indicates improving conditions.
Furthermore, the New Orders Index rose to 55.1 the Employment Index jumped to 49.7 in September from last month's 49.1 and 48.3, respectively, while the Price Paid Index remained unchanged at 53.0, in line with analysts' expectations. The data indicated that nine of the 18 industries reported a rise in new orders, while 10 of the 18 industries reported an increase in production last month. After the release, the US Dollar rose against other major currencies, trading at 1.1217 against the Euro, 1.2833 against the Sterling and 101.44 against the Japanese Yen. Meanwhile, the US Dollar Index rose 0.25% to 95.694.
A quiet Tuesday
There are no important events that could have an impact on the USD/JPY pair today. However, on Wednesday the US ADP Non-Farm Employment Change is due. It is a measure of the change in the number of employed people in the US. Generally speaking, a rise in this indicator has positive implications for consumer spending, stimulating economic growth. Another important data release will be the US Non-Manufacturing 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. Finally, the US Factory Orders, which are a measure of the total orders of durable and non-durable goods, such as shipments (sales), inventories and orders at the manufacturing level, which can offer insight into inflation and growth in the manufacturing sector.USD/JPY surges for the sixth time in a row
On Monday the American Dollar managed to outperform the Japanese Yen for the fifth consecutive time, once again approaching the nine-month down-trend. Technically, the USD/JPY currency pair should now undergo a correction and end the day in a red zone, with the immediate support, namely the 20-day SMA, failing to limit the losses. Technical indicators are also in favour of the bearish scenario, but no event today is expected to cause the pair to erase its intraday gains, acquired during the Asian session. At this point the 102.00 major level could be retaken, despite a group of important levels bolstering resistance around it.Daily chart
The USD/JPY currency pair continued to appreciate on Monday, reaching the descending channel's resistance line. However, today the pair has even made its way higher, breaching the trend-line, but appears to have met resistance at 102.40. The question now is whether the it will be able to remain above 102.00 level or if a close lower occurs.
Hourly chart
Today 63% of traders hold long positions (previously 62%), whereas 77% of all pending orders are to purchase the Greenback.
Meanwhile, there has been a decrease in the number of long positions at other brokers. Right now 64% of OANDA clients are bulls, compared to 69% on Monday. Saxo Bank clients, however, became slightly more bullish than on Monday, being that the portion of longs now takes up 57% of the market.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar
According to the poll that gathered forecasts between September 04 and October 04, traders expect the US Dollar to appreciate to 105.03 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 77% of all forecasts fall above 102 yen, which is the current spot price. By far the most popular intervals are 102.00-103.50 and 108.00-109.50, both chosen by 15% of all the surveyed, compared to popularity of the 105.00-106.50, 106.50-108.00 and 109.50-111.00 intervals.