- 51% of all pending orders are to purchase the Buck
- 50% of all open positions are long/short
- Immediate resistance lies circa 117.30
- The closest support rests around 116.35
- Upcoming Events: Chicago Purchasing Manager's Index
The US job market finished the year on solid footing as an important indicator of layoffs continued to be near historically low levels, showing a resilient labor market. According to the a Labor Department, national jobless claims declined by 10,000, to 265,000, during the previous week from a six-month high in the prior period. The data tend to fluctuate around the year-end holidays, while the trend reveals managers' reluctance to fire workers as demand remains steady. Filings have been below 300,000 for 95 straight weeks — the longest streak since 1970 and a level economists say is typical for a healthy labor market. Millions of Americans have found work in the past five years, pushing the unemployment rate below 5% and eliciting complaints among businesses about how hard it is to find skilled workers to fill open jobs.
In the meantime, the less volatile four-week average of initial claims, meanwhile, dropped by 750 to 263,000. Continuing jobless claims, in turn, advanced by 63,000 to 2.1 million in the week ended December 17. These claims, reported with a one-week delay, reflect the number of people already collecting unemployment checks.
Chicago PMI is the only relevant event
Last weekday of the year brings us only one relative event that could have some impact on the given pair's performance – the Chicago PMI. It is released by the ISM-Chicago, Inc, and captures conditions across Illinois, Indiana and Michigan. This index is an indicator of business trends and it is interrelated with the ISM manufacturing index. It is widely used to indicate the overall economic condition in the US. A result above 50 is bullish for the USD, whereas a result below 50 is seen as bearish.USD/JPY trades within channel's borders
Yesterday's decline in the USD/JPY pair's exchange rate was the last touch required in order to establish a descending channel pattern. Today a bearish outcome is highly unlikely, as the immediate support, which kept the pair from falling deeper down yesterday, is now also reinforced by the channel's lower trend-line, making demand around the 116.35 level even stronger. According to technical indicators the US Dollar is to outperform the Yen today, providing an additional sign of a possible positive outcome. However, the Greenback could reclaim the 117.00 major level today, but a surge beyond 117.25 is doubtful, as there the channel's resistance line coincides with the weekly PP.Daily chart
The USD/JPY currency pair continued to decline on Thursday after piercing the up-trend on Wednesday. However, on Friday the pair began to recover, making its way back to the 200-hour SMA near 117.30, which confirms the daily outlook, as a strong resistance is located there.
Hourly chart
Market sentiment is now equally divided between the bulls and the bears, while only 51% of all pending orders are to purchase the Buck.
Right now 56% of OANDA clients are bears, unchanged since Thursday. In the meantime, Saxo Bank traders turned slightly bullish, being that 51% of their open positions are long and the remaining 49% are short.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between November 30 and December 30, traders expect the US Dollar to appreciate to 117.84 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 58% of all forecasts fall above 117 yen, which is close to the current spot price. The majority of people voted expect the US Dollar to cost somewhere between 120.00 and 121.50 yen in three months, with 15% of the survey participants choosing this trading range. At the same time, the second most popular interval was the 118.50-120.00 one, with 14% of survey participants choosing it.