- The share of buy orders surged from 46 to 48%
- 58% of all open positions are short
- Immediate resistance lies at 112.48
- The closest support rests around 111.00
- Upcoming events: US Preliminary GDP, US CB Consumer Confidence, FOMC Members Dudley and Powell Speeches
New orders for US manufactured durable goods rose markedly last month, driven by higher demand for machinery and other equipment, official figures revealed on Wednesday. Overall, new orders for capital goods jumped 4.8% in October, according to the US Department of Commerce. Meanwhile, market analysts anticipated a slight acceleration to 1.2%. The September figure was revised down from -0.1% to -0.3%. Demand for transportation equipment jumped 12% during the reported month, the largest gain since October 2015. Back in September, new orders for transportation equipment climbed 0.4%. Excluding orders tied to transportation, core durable goods orders increased 1.0%, following September's downwardly revised gain of 0.1% and surpassing the 0.2% rise market forecast. The US economy is set to expand at a 3.6% annual pace in the Q3, after growing 2.9% in the previous quarter.
Separately, the Department of Labor reported on Wednesday the number of Americans filing for unemployment benefits increased to 251,000 in the week ending November 18, up from the prior week's 233,000, whereas analysts expected a milder rise to 241,000.
US GDP is the main driver today
Today all focus turns to the US fundamentals, such as the US GDP, as it shows the monetary value of all the goods, services and structures produced within a country in a given period of time. GDP is a gross measure of market activity, because it indicates the pace at which a country's economy is growing or decreasing. Another possible event will be the US CB Consumer Confidence, which captures the level of confidence that individuals have in economic activity. A high level of consumer confidence stimulates economic expansion, while a low level drives to economic downturn.USD/JPY attempts to return above 112.00
The US Dollar took a breath on Monday, allowing the Japanese Yen to trim some losses. Nevertheless, it appears that the Greenback is back on track today and is ready to outperform the Yen once more. Technical indicators are also in favour of a rally, however, since the three-week ascending channel pattern was broken yesterday, risks of the bearish momentum continuing are still present. With a number of US fundamental data to drive the markets this week, the USD/JPY pair could experience serious volatility in either direction. In case bears take over today, the 111.00 mark is expected to hold, being bolstered by the weekly S1 and the monthly R3, while the ceiling is not determined.Daily chart
After a breakout from the ascending channel pattern the Greenback managed to find support slightly under the 112.00 mark, namely the 200-hour SMA. This moving average keeps providing support today, which could help the USD/JPY pair retain its position around the current highs. However, a breach lower is likely to set the pair on a bearish path towards 110.00.
Hourly chart
Bears gave in again today, as 58% of all open positions are short (previously 62%). The share of buy orders surged from 46 to 48%.
Meanwhile, there has been a small increase in the number of long positions at other brokers. Right now 57% of OANDA clients are bears, compared to 58% on Monday. In the meantime, Saxo Bank clients also remain 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 October 28 and November 29, traders expect the US Dollar to appreciate to 109.34 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 60% of all forecasts fall above 108 yen, which is close to the current spot price. The majority of people voted expect the US Dollar to cost somewhere between 111.00 and 112.50 yen in three months, with 20% of the survey participants choosing that trading range. Meanwhile, the second most popular interval is the 105.00-106.50 one, chosen by 13% of all the surveyed, compared to popularity of the 106.50-108.00, 108.00-109.50 and 109.50-111.00 intervals.