- 65% of all pending orders are to acquire the Buck
- 62% of all open positions are long
- The nearest significant resistance is around 111.80
- The 109.22 area is still a significant support
- Upcoming events: US Building Permits, US Housing Starts, Michigan Consumer Sentiment Index, US Labor Market Conditions Index
The number of Americans filing for unemployment benefits dropped more than expected last week. The Labour Department reported on Thursday that initial jobless claims fell 8K to 237K in the week ended June 9, while market analysts anticipated a slighter decrease to 241K during the reported week. According to analysts, the US labour market is at or close to full employment, with the unemployment rate a 16-year low of 4.3%. Thursday's data also showed that the number of people continuing to receive jobless benefits rose 6K to 1.94M in the week ending June 3.
Other data released by the Federal Reserve showed that import prices dropped 0.3% last month, following the prior month's downwardly revised rise of 0.2% and falling behind expectations for a 0.1% increase. Also, the New York State Fed reported that its Manufacturing Index for the region surged to 19.8 in June, up from May's -1.0, whereas the Philadelphia Fed's Manufacturing Index for the Philadelphia State fell to 27.6 points in June, whereas analysts anticipated a steeper drop to 25.5 from May's 38.8.
US Building permits is the only relevant event
Friday is a rather quiet day, as it brings only one relevant event, namely the US Buildings Permits. The Building Permits show the number of permits for new construction projects. It implies the movement of corporate investments and tends to cause some volatility to the USD. Other data releases are also scheduled for today, but they are unlikely to have significant impact on the US Dollar, thus, on the given pair.
USD/JPY attempts to stretch gains
On Thursday, the US Dollar surprised to the upside, having successfully outperformed the Japanese Yen. As a result, the given pair was able to reach the 111.00 handle, but even then refused to stop appreciating. The current target is the monthly pivot point, located at 111.79; this area could provide strong resistance and limit the further gains. This pivot point is also the only solid obstacle on the USD/JPY pair's path, which is preventing the Buck from reaching its main target—the seven-month down-trend. On the other hand, the Greenback could struggle to post further gains, as some indicators suggest the rally ran out of steam, such as the RSI, which reached its 70 reading today.Hourly chart
The tough resistance around 112.00 is also confirmed on the daily chart, in fact it is even stronger there, being bolstered by the 100-day SMA and the upper Bollinger band. This could confirm the possibility of that area limiting the gains for the USD/JPY pair, which could result in another leg down eventually.
Daily chart
Traders' sentiment turned bullish today, with 62% of all open positions being long and the other 38% - short. Meanwhile, there are 65% of all pending orders set to buy the Greenback.
At the moment, 63% of OANDA clients are long the US Dollar against the Yen, while the remaining 37% are short. In addition, Saxo Bank clients' sentiment slightly worsened over the day, as 62% of their open positions are now long.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between May 16 and June 16, traders expect the US Dollar to appreciate to 113.10 yen in three months' time, while the forecast for March 31 was 117.66 yen. It is also worth noticing that 59% of all forecasts fall above 112.50 yen, which is above the current spot price. The majority of people who voted expect the US Dollar to cost somewhere between 115.50-117.00 yen in three months, with 17% of survey participants choosing this trading range. Furthermore, the 108.00-109.50 and the 112.50-114.00 ranges were the second most popular ones, with 12% of the voters choosing each of them.