- The share of buy orders inched up from 62 to 61%.
- 58% of traders with a positive outlook towards the US Dollar
- Immediate resistance lies at 113.19
- The closest support rests circa 112.8000
- Upcoming events: US Labor Market Conditions Index, US JOLTS Job Openings, US Trade Balance, US Consumer Credit
US companies created more jobs than expected last month, following the disappointing December figure. The Bureau of Labor Statistics revealed on Friday that nonfarm payrolls rose 227,000 in January, compared with the preceding month's upwardly revised 157,000, while market analysts anticipated an increase to 170,000 in the reported month. Meanwhile, the unemployment rate came in at 4.8% last month, up from December's reading of 4.7%. Friday's data also showed that average hourly earnings grew 0.1% in January, following the prior month's downwardly revised 0.2% and falling behind the 0.3% rise market forecast. Earlier this week, the Federal Reserve declined to raise interest rates. However, policymakers maintained their projection of three hikes in 2017. Separately, the Institute of Supply Management reported its Non-Manufacturing Purchasing Managers' Index fell to 56.5 in January from the preceding month's 57.2, whereas analysts penciled in a slight decrease to 57.0 points.
Overall, the slight decrease in the headline Index was mainly driven by the weaker New Orders Index, which dropped to 58.6 from 60.7 in the previous month; however, order backlogs held on the same level. Moreover, the ISM said the Employment Index advanced to 54.7, while the Price Index surged to 59.0 from 56.0, representing an increase in inflationary pressures.
Uneventful Monday
Monday is a very quiet day in terms of fundamental events, with the only relative one being the US Labor Market Conditions Index. It shows the change in the level of composite index based on 19 labor market indicators, however, this event tends to have close to no impact on the forex market, as most of the indicators used in its calculation have already been released.USD/JPY puts 112.60/50 demand area to another test
A strong US NFP reading on Friday was insufficient for the USD/JPY pair to remain elevated, as weak secondary data weighed on the Buck and caused the support area circa 112.60/50 to be retested. Consequently, this area is expected to provide sufficient support today, causing the US Dollar to close trade in the green zone. The weekly pivot point at 113.19 is the closest resistance, but there is no impetus present today, which has the potential to push the pair that high, excluding external factors of course. Meanwhile, technical indicators are unable to confirm the possibility of the positive outcome.Daily chart
The USD/JPY currency pair keeps struggling to climb over the 200-hour SMA, which in turn keeps pushing the pair lower. So far the Buck keeps finding psychological support, but if poked continuously, the demand area could break, resulting in more USD/JPY weakness.
Hourly chart
There are 58% of traders with a positive outlook towards the US Dollar today, compared to 61% on Friday. At the same time, the share of buy orders inched up from 62 to 61%.
Right now 55% of OANDA clients are bulls, compared to 56% on Friday. In the meantime, Saxo Bank clients remain on the bullish side, being that 57% of their open positions are now long and the remaining 43% are short.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between January 06 and February 06, traders expect the US Dollar to appreciate to 115.92 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 54% of all forecasts fall below 117 yen, which is above 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 16% of the survey participants choosing this trading ranges. At the same time, the second most popular interval was the 111.00-112.50 ones, with 13% of survey participants choosing it.