- 60% of all pending orders are to buy the Buck
- 68% of traders are long the Buck
- Immediate resistance lies around 110.15
- The closest support rests at 109.71
- Upcoming events: US HPI, US CB Consumer Confidence, US New Home Sales
US manufacturing activity in the Mid-Atlantic region slowed markedly in April, official figures revealed on Thursday. The Philadelphia Federal Reserve reported its Manufacturing Index dropped to 22.0 in the reported month, following March's reading of 32.8 and falling behind analysts' expectations for a decrease to 25.6 points. Analysts stated that business optimism prompted by Donald Trump's win in the presidential election started to fade, putting downward pressure on business activity. Thursday's data also showed the New Orders Index fell to 27.4 from 38.6 points posted in March, the highest since December 1987.
Meanwhile, the six-month business outlook declined to 45.4 from 59.5 points registered in March, the strongest since August 2014. The Price Index dropped to 33.7 from 40.7 points posted in March, the highest since May 2011. On the positive side, the Employment Index rose to 19.9, the strongest since May 2011. Manufacturers also said that they would increase capital spending this year due to expected higher sales. Furthermore, 36.7 of the respondents said that capital spending would take place in the first half of the year. Other data release on Thursday showed initial jobless claims climbed 10,000 to 244,000 last week.
US HPI, New Home Sales and Consumer Confidence
Today attention turns to three US macroeconomic data releases. First of all, the US HPI, as it provides an estimated value of housing market conditions. It is an important indicator, as the housing market is considered as a sensitive factor to the US economy. Second, the US New Home Sales, which is an important measure of housing market conditions. House buyers spend money on furnishing and financing their homes, so as a result the demand for goods, services and the employees is stimulated. Finally, the US Consumer Confidence, which is released by the Conference Board. 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.USD/JPY en route to 111.00
The Greenback underwent a corrective decline on Monday, but the losses against the Yen slightly exceeded expectations, as trade closed below the 110.00 major level. Where the given psychological support failed, the weekly R1 at 109.71 succeeded, but that does not imply that bulls are to continue pushing the Buck further up. Downside risks still persist and technical indicators support that. Nevertheless, in case the USD/JPY slips below 109.50, the tough demand cluster around 109.00 is expected to cause the pair to rebound. On the other hand, the nearest significant resistance rests only at 111.00, therefore, the US Dollar has sufficient space for a bullish development today.Daily chart
The 200-hour SMA is now fully supporting the previous week's up-trend, but a retest today is doubtful. The hourly chart is unable to provide any clearer information concerning possible future developments, with the only sign suggesting that in the medium term the USD/JPY is to continue appreciating.
Hourly chart
Today 68% of traders are long the Buck (previously 69%), while the share of buy orders edged higher from 58 to 60%.
Right now 62% of OANDA clients are bulls, compared to 61% on Monday, the bullish sentiment has been holding around the same level for some time now. In the meantime, Saxo Bank clients retain a positive outlook towards the US Dollar, being that 63% of their open positions are now long and the remaining 37% are short.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between March 25 and April 25, traders expect the US Dollar to appreciate to 110.81 yen in three months' time, while the forecast for March 31 was 117.66 yen. It is also worth noticing that 52% of all forecasts fall under 111 yen, which is still above the current spot price. The majority of people voted expect the US Dollar to cost somewhere either between 108.00 and 109.50 or between 112.50 and 114.00 yen in three months, with 14% of the survey participants choosing each of these trading ranges. At the same time, the second most popular intervals were the 106.50-108.00, the 114.00-115.50 and the 115.50-117.00 ones, with 11% of survey participants choosing each of them.