- The portion of buy orders decreased from 57 to 55%
- Market sentiment remains bearish at 59%
- Immediate resistance lies around 118.90
- The closest support rests around 117.10
- Upcoming Events: US Core Durable Goods Orders; US Final GDP; US Unemployment Claims; US Durable Goods Orders; US HPI; US Personal Spending; US Personal Income; US CB Leading Index;
Both building permits and housing starts dropped more than expected last month, suggesting that the Q4 growth rate could be possibly revised downwards. According to the US Department of Commerce, new-home construction fell 18.7%, the biggest decrease in almost two years, to a seasonally adjusted annual rate of 1.09 million units in November, while market analysts anticipated a slight deceleration to 1.23 million during the reported period. Housing starts tend to be volatile on a monthly basis. Meanwhile, the October figure was revised up to a 1.34 million-unit pace, the highest level since July 2007, from the originally reported 1.32 million. The Commerce Department also reported that building permits declined 4.7% to an annualized rate of 1.20 million units, following October's upwardly revised reading of 1.26 million, whereas economists expected them to decrease to a 1.24 million-unit pace.
Existing home sales in the United States rose for the third consecutive month in November, surprising markets and hitting their highest level for almost a decade. According to the National Association of Realtors, home resales advanced 0.7% to an annualized rate of 5.61 million units in the reported period, following October's downwardly revised rate of 5.57 million, surpassing analysts' expectations for a slight decline of 1.0% to a 5.52 million-unit pace and reaching the highest since February 2007. On an annual basis, sales increased 15.4% in November. According to the latest data published by Freddie Mac, the fixed 30- year mortgage rate has climbed around 60% to an average rate of 4.16% since Donald Trump's victory in the US presidential election. Moreover, mortgage rates are likely to go even higher after the Fed rose its key interest rate to 0.75% from 0.50% last week as well projected three more hikes in 2017. Separately, the Energy Information Administration announced on Wednesday a 2.3 million barrel increase in US crude oil inventories during the week ending December 16, while market analysts anticipated a decline of 2.4 million barrels, following the preceding week's 2.6 million barrel slip.
Loads of US data after a quiet week
It seems that instead of consistently providing the markets with data US statisticians have decided to release everything today and take a day off on Friday before Christmas. The data will begin incoming at 13:30 GMT, when the US Durable Goods Orders and US Core Durable Goods Orders will be out. In addition, the Final GDP will be published. Moreover, the US Unemployment Claims will be released at the same time. That is not all for that time, as the US Final GDP Price Index also will be released at 13:30 GMT. If that will not be enough to establish an understanding of the future movements of the US Dollar and the markets, there will be an additional data release at 15:00 GMT. At that time the US Core PCE Price Index, US CB Leading Index, Personal Spending and Personal Income will be released in the common pool of information.USD/JPY remains rather flat on Thursday morning
The US Dollar surged against the Japanese Yen on early Thursday morning. However, the gains were rather minor. The slight gains scored on Thursday morning were a continuation of the currency exchange rates late Wednesday's rebound against the weekly PP, which is located at 117.14. It is most likely that the currency pair will continue to surge, as not only the ascending trend is still viable, but also daily aggregate technical indicators forecast a surge of the Greenback against the Yen.Daily chart
The hourly chart for the pair reveals that the pair did not simply rebound against the weekly PP. The rate reached the support level at 12:00 GMT on Wednesday. It bounced near it for three hours until it suddenly skyrocketed and the rate jumped from 117.14 at 14:00 GMT to 117.87 around 16:00 GMT. Afterwards some profit taking occurred until the rate resumed the surge.
Hourly chart
Traders remain bearish regarding the pair, as 59% of open positions were short on Thursday morning. However, 55% of trader set up orders were set up to buy the US Dollar.
Meanwhile, there has been a increase in the number of long positions at other brokers. Right now 53% of OANDA clients are bears, compared to 56% on Wednesday. In the meantime, Saxo Bank have become neutral regarding the pair.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between November 22 and December 22, traders expect the US Dollar to appreciate to around 117 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 71% of all forecasts fall above 114 yen, which is close to the current spot price. The majority of people voted expect the US Dollar to cost somewhere between 117.00 and 121.50 yen in three months, with 16% of the survey participants choosing this trading range. Meanwhile, the second most popular intervals is the 120.00-121.50 one, with 30% of the votes.