- 65% of all pending orders are to acquire the Buck
- 72% of all open positions are long
- Immediate resistance lies at 111.26
- The closest support rests around 110.35
- Upcoming events: US Goods Trade Balance, US CB Consumer Confidence, US Preliminary Wholesale Inventories
Orders for US-manufactured long-lasting goods rose more than expected last month, official figures revealed on Friday. The US Department of Commerce reported that orders for durable goods advanced 1.7% in February, following the preceding month's upwardly revised gain of 2.3% and surpassing analysts' expectations for a 1.1% increase. Excluding transportation equipment, orders for US-manufactured durable goods climbed 0.4%, compared to the previous month's reading of 0.0%. In the meantime, market analysts anticipated a bigger gain of 0.5% during the reported period.
However, the following rise marked the sixth straight monthly increase in orders for core durable goods. Analysts suggest that businesses will improve even more if US lawmakers succeed in lowering corporate taxes and reducing regulations. Non-defence capital goods orders excluding aircraft dropped 0.1%, following January's revised climb of 0.1% and falling behind expectations for a 0.5% increase. Shipments of non-defence capital goods excluding aircraft, used in calculating GDP, advanced 1.0% last month. Data also showed that orders for civilian aircraft rose 47.6%, compared to a 83.3% surge in the prior month. Boeing reported it received 43 orders for aircraft in February, up from the previous month's 26.
Uneventful Monday
Monday is a quiet day in terms of fundamental data, thus, attention turns to the Tuesday's data, mostly on the US CB Consumer Confidence. It captures the level of confidence that individuals have in economic activity. A high level of consumer confidence stimulates economic expansion, while a low level drives to economic downturn. Generally, a high reading is seen as positive for the USD, while a low reading is negative.USD/JPY: 110.00 eyed
The Buck succeeded in reversing polarity, but only for a day, as the bearish momentum returned over the weekend. Trade opened with the USD/JPY pair erasing all Friday's gains, with the 111.00 major level getting a full-blown downside breach. The Greenback now risks dropping towards the 110.00 level, with the only support on the pair's path being the lower Bollinger band and the weekly S1 around 110.35. In case the Buck falls under 110.00, the monthly S2 at 109.74 could still save it from further weakness, but a failure would open the door for a plunge to 108.00, being that no political or economic driver triggers a rebound earlier.Daily chart
An attempt to breach the descending channel's resistance line was made on Friday, but the exchange rate rapidly returned within its borders over the weekend. The channel pattern was prolonged, which suggests that another retest of the lower trend-line is possible, most likely near 109.00/108.50.
Hourly chart
Market sentiment suggests that the US Dollar might be overbought, as 72% of all open positions are currently long. At the same time, the share of purchase orders remained unchanged at 65%.
Right now 60% of OANDA clients are bulls, compared to 63% on Friday. In the meantime, Saxo Bank clients retain a positive outlook towards the US Dollar, being that 62% of their open positions are now long and the remaining 38% are short.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between February 27 and March 27, traders expect the US Dollar to appreciate to 115.08 yen in three months' time, while the forecast for March 31 was 117.66 yen. It is also worth noticing that 61% of all forecasts fall above 114 yen, which is above the current spot price. The majority of people voted expect the US Dollar to cost somewhere between 118.50 and 120.00 yen in three months, with 20% of the survey participants choosing this trading range. At the same time, the second most popular interval was the 106.50-108.00 one, with 15% of survey participants choosing it.