- 60% of all pending orders are to sell the US Dollar
- 61% of traders have a negative outlook towards the US Dollar
- Immediate resistance lies at 114.70
- The closest support rests around 114.01
- Upcoming events: US Manufacturing PMI, US Initial Jobless Claims, US Construction Spending
The number of homes that went under contract inched higher in October, a sign the housing market could be plateauing in the final months of the year. The National Association of Realtors reported that its pending home sales index, which tracks contract signings for previously owned homes, edged up 0.1% from a downwardly revised September reading to a seasonally adjusted 110.0. Sales typically close within a month or two of signing. It is essential to note that while demand for housing is high, supply still continues to weaken across much of the nation and is well below 2015 levels. While homebuilders ramped up production in October, overall construction is still well below historical norms. Builders cite the high costs of land, labor and regulation as barriers to increased volume.
In addition to that data showed that US crude oil inventories fell unexpectedly last month. In a report, Energy Information Administration said that US crude oil inventories fell to a seasonally adjusted annual rate of -0.884M, from -1.255M in the preceding month.
US Manufacturing PMI and Construction Spending
Today the most impact on the USD/JPY is likely to be from the US Manufacturing PMI, released by both the Markit Economics and the Institute for Supply Management. The PMI captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the Manufacturing PMI is an important indicator of business conditions and the overall economic condition in the United States. Some attention could also be paid to the US Construction Spending, as it is an indicator that measures the total amount of spending in the US on all types of construction. The residential construction component is useful for predicting future national new home sales and mortgage origination volume.USD/JPY takes a breath after Wednesday's surge
Amid strong US fundamental figures on Wednesday, the American Dollar gained more than 200 pips against the Japanese Yen, thus, climbed over the 23.60% Fibo level, which caused the pair to exit its ascending channel pattern. The Buck now has a chance to not only retake the 115.00 level, but even the 116.00 mark, despite the weekly R2 and the Bollinger band forming relatively strong resistance there. However, the USD/JPY pair is first required to pierce the weekly R1 at 114.70, which appears to be causing setbacks in the Greenback's bullish trend. As a result, a small corrective decline is possible today, but with the 113.00 mark remaining intact.Daily chart
The 200-hour SMA keeps providing formidable support for the USD/JPY currency and now, with the 23.60% Fibo broken, the bullish momentum is expected to last, in spite of the ascending channel pattern losing its viability.
Hourly chart
There are 61% of traders with a negative outlook towards the US Dollar. Meanwhile, 60% of all pending orders are to sell the US Dollar.
Meanwhile, there has been a decrease in the number of long positions at other brokers. Right now 58% of OANDA clients are bears, compared to 55% on Wednesday. In the meantime, Saxo Bank clients also remain slightly on the bearish side, being that the portion of shorts takes up 52% of the market.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar
According to the poll that gathered forecasts between November 01 and December 01, traders expect the US Dollar to appreciate to 109.51 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 59% 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 19% of the survey participants choosing that trading range. Meanwhile, the second most popular interval is the 105.00-106.50 one, chosen by 12% of all the surveyed, compared to popularity of the 106.50-108.00, 108.00-109.50 and 109.50-111.00 intervals.