- The portion of buy orders increased from 54% to 56%
- Market sentiment remains bearish at 54%
- Immediate resistance lies around 117.40
- The closest support rests around 116.50
- Upcoming Events: Minor data released during the day
New orders for US-made capital goods advanced more than expected in November due to strong demand for machinery and primary metals, suggesting some of the oil-related drag on manufacturing was starting to fade. According to the Commerce Department non-defense capital goods orders excluding aircraft, a went up 0.9% after an unrevised 0.2% gain in October. Moreover, there were increases in orders for electrical equipment, appliances and components, as well as computers and electronic products. A drop in oil prices last year, together with a surge in the dollar, pressured manufacturing. Much of the impact has been through weak business spending on equipment, which has contracted for four consecutive quarters. However, with oil prices hovering above $50 per barrel, manufacturing, which accounts for 12% of the US economy, is starting to perk up. In the meantime, the US economy soared at a faster pace last quarter than previously estimated, but the stronger gains only help bring the year's growth rate back in line with the long, sluggish expansion. According to the Commerce Department the US GDP expanded at an inflation- and seasonally adjusted annual rate of 3.5% in the third quarter.
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.
Everyone is on holiday except the Japanese
There are no data releases planned in the markets. The only exception are the Japanese, who released a batch of data at 11:30 GMT.USD/JPY falls on Monday
The US Dollar lost ground against the Japanese Yen, as the currency exchange rate depreciated during Monday's trading session. The main reason for that was the fact that the pair ended Friday's trading at 117.36, and with the start of a new week that mark was below a new level of resistance. The pair began Monday below the weekly PP at 117.39. It is possible that the pair will soon fall to the 116.54 mark, as there are no other support levels before that.Daily chart
It seems that the situation has reversed, as the weekly levels of significance changed. All of the SMAs are now located above the rate and combined with the weekly PP form a strong resistance at the level of 117.40. In addition there is a clear medium term down trend.
Hourly chart
SWFX traders remained bearish on the pair, as 54% of open positions were short on Monday. Meanwhile, 56% of trader set up pending commands were to buy the Greenback.
Meanwhile, there has been a increase in the number of long positions at other brokers. Right now 54% of OANDA clients are bears, compared to 55% on Friday. In the meantime, Saxo Bank remain neutral regarding the pair.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar
According to the poll that gathered forecasts between November 26 and December 26, traders expect the US Dollar to appreciate to above 117 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 58% of all forecasts fall above 117 yen, which is close to the current spot price. The majority of people who voted expect the US Dollar to cost somewhere between 120.00 and 121.50 yen in three months, with 17% of the survey participants choosing this trading range.