- 71% of all pending orders are to purchase the US Dollar
- 62% of all open positions are long
- A number of important levels form resistance around 101.80
- The closest support rests around 100.90
- Upcoming events: US Markit and ISM Manufacturing PMIs, US Construction Spending
The number of Americans filing for unemployment benefits rose less than expected, official figures revealed on Thursday. According to the US Department of Labor, the number of claimants jumped 3,000 to a seasonally adjusted rate of 254,000 in the week ended September 24 after touching the lowest level since mid-July in the previous seven days. Meanwhile, market analysts anticipated an increase to 260,000 claims in the week ending September 24, following the preceding week's 251,000. Filings for US unemployment benefits remained below the 300,000 level for the 82nd consecutive week, the longest streak since 1973. The four-week moving average of initial claims, considered a better measure of labor market trends, declined 2,250 to 256,000 last week. Furthermore, so-called continuing claims dropped 46,000 to 2.062 million in the week ended September 17.
According to the final Q2 GDP print released by the Department of Commerce the US economy expanded at an inflation-adjusted 1.4% seasonally adjusted annual rate in the Q2 after growing 0.8% in the Q1. Economists expected the Q2 GDP to increase 1.3%. The US Dollar Index advanced to 95.49 from 95.42 ahead of the release.
US Manufacturing PMI and Construction Spending
There are only two events that could have an impact on the USD/JPY pair's performance today, namely the Manufacturing PMI and the Construction Spending. The US Manufacturing PMI is released by both the Markit Economics and the Institute for Supple Management. It captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the Manufacturing PMI is an important indicator of business conditions and the overall economic condition in the US. The Construction Spending is released by the US Census Bureau and is an indicator that measures the total amount of spending in the US on all types of construction. The residential construction component is useful for predicting future national new home sales and mortgage origination volume.USD/JPY: upside limited
On the last day of September the US Dollar managed to remain above the 101.00 major level, posting gains against the Japanese Yen for the fourth consecutive day. Despite that rally, further upside potential is still seen as limited, due to a nine-month resistance line located at 101.85, also being bolstered by a number of other resistance levels. Consequently, the USD/JPY currency pair is expected to surge only 55 pips, but technical indicators suggest otherwise. In case bears take over the market, the 101.00 mark is expected to be the bottom floor, with the weekly PP and the 50% Fibo forming support around it.Daily chart
Once again the 200-hour SMA prevented the USD/JPY pair from falling deeper down, creating an opportunity for the exchange rate to put the down-trend to the test. This resistance line kept the US Dollar declining against the Yen since the beginning of the year, and no breakout is expected just yet.
Hourly chart
There are 62% of all open positions being long today (previously 64%). Meanwhile, 71% of all pending orders are to purchase the US Dollar, compared to 60% on Friday.
Meanwhile, there has been a decrease in the number of long positions at other brokers. Right now 69% of OANDA clients are bulls, unchanged since Friday. Saxo Bank clients, however, became less bullish than on Friday, being that the portion of longs now takes up 56% of the market.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar
According to the poll that gathered forecasts between September 03 and October 03, traders expect the US Dollar to appreciate to 105.11 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 77% of all forecasts fall above 102 yen, which is the current spot price. By far the most popular interval is 108.00.50-109.50, chosen by 15% of all the surveyed, compared to popularity of the 105.00-106.50, 106.50-108.00 and 109.50-111.00 intervals.