- The share of buy orders slid from 54 to 53%
- 52% of traders have a positive outlook towards the Greenback
- Immediate resistance lies at 116.20
- The closest support rests around 115.50
- Upcoming events: US JOLTS Job Openings, US Crude Oil Inventories
The US economy created less jobs than expected in the last month of 2016, disappointing markets. The US unemployment rate rose in line with analysts' expectations from 4.6% to 4.7%, while the participation rate climbed from 62.6% to 62.7%. The report also showed US nonfarm payrolls advanced 156,000, while markets anticipated a gain of 177,000, following the previous month's increase of 178,000. Official data published by the Bureau of Labor Statistics showed manufacturing employment advanced 17,000 in December, despite small decreases in two previous months. In the meantime, there was also a slight fall in construction jobs and decline of over 15,000 in temporary help-services jobs. Nevertheless, government employment increased 12,000. In the meantime, the BLS said the Average Earnings Index jumped 0.4%, compared to a 0.1% decrease in November, which boosted the annual rate from 2.5% to 2.9%, the strongest gain since June 2009. Despite mixed economic indicators, the data is likely to maintain confidence in the job market and analysts' expectations for the Federal Reserve's rate hikes in 2017.
After the report, the US Dollar strengthened immediately. The EUR/USD pair dropped to 1.0550, while the USD/JPY held steady at 116.50.
Another uneventful day
Tuesday is also quiet in terms of fundamental data releases, with only one event having some importance – the US JOLTS Job Openings, which shows the number of new jobs openings of the previous month, with the exception of the farming industry. The main anticipated data is due only on Friday, namely the US Retail Sales and the PPI.USD/JPY risks falling under 116.00
A new spark of risk-aversion prevented the USD/JPY pair from posting more gains yesterday, causing the pair to fall towards 116.00. Despite the decline, the pair remained within its consolidation range, but due to a breach of that range last week, risks are now skewed to the downside. The Buck's inability to recover today could ultimately cause a drop towards the 114.00 mark, close to where the monthly S1 is located. However, first of all the pair is required to pierce the Bollinger band and the weekly S1 support area. This demand cluster still has the ability to trigger some USD-buying, which is to preserve the consolidation trend, as technical indicators suggest.Daily chart
The Greenback approached the 115.20 area once again, where the exchange rate received some bullish impetus, suggesting a psychological support is located around that area. The Buck's rally is unlikely to last, with another leg down ultimately anticipated and attempt to pierce the 115.00 mark, unless stronger US fundamental data provides a boost.
Hourly chart
Today 52% of traders have a positive outlook towards the Greenback (previously 51%), while the share of buy orders slid from 54 to 53%.
Right now 53% of OANDA clients are bears, compared to 57% on Monday. In the meantime, Saxo Bank broke out of the perfect equilibrium, being that 53% of their open positions are now long and the remaining 52% are short.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between December 10 and January 10, traders expect the US Dollar to appreciate to 118.42 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 61% 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 either between 121.50 and 123.00 or between 123.00 and 124.50 yen in three months, with 14% of the survey participants each choosing these trading ranges. At the same time, the second most popular intervals were the 111.00-112.50 and the 114.00-115.50 ones, both with 12% of survey participants choosing it.