- The share of purchase orders rose up to 54%
- Bullish market sentiment remains unchanged at 62%
- Resistance rests around 103.20
- The weekly PP at 101.79 represents immediate support
- 58% of the survey participants expect the US Dollar to cost less than 108.00 yen in three months
- Upcoming events: US Retail and Core Retail Sales, US PPI and Core PPI, Reuters/Michigan Consumer Sentiment
According to the Labour Department Thursday's release, the number of people filing for unemployment benefits went down during the last week, figuring out that stable labour market strength in early August that could help speed up economic growth. The number of Americans filing for unemployment benefits dropped 1,000 to a seasonally adjusted 266,000 in the August 6 week. Initial claims have been below the key 300,000 level for the past 75 weeks in a row, showing the longest streak since 1970 as well as did not depict any signs of rising. Meanwhile, economists polled by Reuters had forecast initial claims reaching the 265,000 mark in the latest week. Also, Labour Department highlights there were no special factors influencing last week's claims data and no states had been estimated. Moreover, summer usually brings turbulences in weekly figures due to the re-equipment of auto plants. However, this summer, weekly claims figures have been more or less consistent, around 270,000 or fewer for the past eight weeks.
The another report showed the US natural gas futures plunged to a two-month low in North America, after data revealed that natural gas supplies in storage in the US added more than forecasted last week.
US Retail Sales, US PPI and Reuters/Michigan Consumer Sentiment
Once again all attention turns to the US fundamentals, such as the Retail Sales. The Retail Sales measure the total receipts of retail stores. Monthly percent changes reflect the rate of changes of such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. The Core Retail Sales, however, exclude the automobile sector. At the same time, the PPI is due. It is the measure of the average changes in prices in primary markets of the US by producers of commodities in all states processing. In the Core PPI volatile products such as food and energy are excluded in order to capture an accurate calculation. Finally, the Reuters/Michigan Consumer Sentiment Index is an event to pay attention to. It is a survey of personal consumer confidence in economic activity. It shows a picture of whether or not consumers are willing to spend money. Generally speaking, a high reading anticipates positive for the USD, while a low reading is seen as negative.USD/JPY muted ahead of Retail Sales data
Although the USD/JPY currency pair completely erased Wednesday's losses yesterday and stabilised on top of the weekly PP again, technical indicators in all timeframes still suggest that more bearish momentum is to come. The 101.00 major level should be the bottom today, also being bolstered by the weekly S1. However, US fundamentals tend to surprise with strong figures, and another such surprise could trigger a rally today. The 102.50 mark should technically prevent the exchange rate from climbing higher, even though the nearest resistance lies circa 103.00.Daily chart
The hourly chart confirms the outlook that a drop below 101.00 is doubtful, as the pair has been in a short-term up-trend for a week now. The trend-line is providing additional support near 101.00, while the pair appears to have already bounced back from significantly to prolong the bullish momentum.
Hourly chart
Bullish market sentiment remains unchanged at 62%, but the share of purchase orders added 13 percentage points, having risen up to a total of 54%.
Sentiment at Saxo Bank is virtually the same - 66% of the Denmark-based clients are currently holding long positions. Traders at OANDA are even more confident in Dollar's appreciation - as many as 71% of open positions are long. Using the data as a contrarian indicator, the sentiment implies a cheaper Dollar. There is little room for new buyers to enter the market, and if the bulls start closing positions on profit-taking, this could create a strong selling pressure.
Spreads (avg, pip) / Trading volume / Volatility
Slightly more than a half expect the exchange rate to fall below 108.00 yen
Slightly more than half of the surveyed (58%) now assume that the US Dollar is to cost less than 108.00 yen after a three month time. The most popular choice, however, implies that the Greenback is to cost more than 112.50 yen in three months, selected by 16% of the voters. According to the votes collected between July 12 and August 12, the mean forecast for November 12 is 105.73. At the same time, 13% of the surveyed believe the Greenback could cost either somewhere between 99 and 100.50 yen, between 108.00 and 109.50 yen or even between 109.50 and 111.00 yen in three months.