- 51% of all pending orders are to acquire the US Dollar
- 66% of traders hold short positions
- The nearest resistance is at 115.15
- Immediate support rests at 114.15
- Upcoming events: US PPI and Core PPI, US Initial Jobless Claims
The US Import Price Index managed to post a larger-than-expected gain over the course of April, official data revealed on Wednesday. The US Bureau of Labour Statistics reported that the price index for US imports tacked on 0.5% in April, following the upwardly revised 0.1% uptick registered in the preceding month and beating analysts' expectations for a 0.2% increase. April's surge was mainly driven by higher fuel prices, which rose 1.6% over the month of April, following a 0.9% drop observed in March. A 1.6% hike in prices for petroleum and a 4% advance in natural gas prices appeared to be the main contributors to the increase in fuel prices.
In the meantime, the price index for imports excluding fuel rose 0.3% in April, following an increase of 0.2% posted in the previous month. As reported by the US BLS, higher prices for food and beverages, industrial supplies and materials as well as an uptick in feeds managed to bolster the overall acceleration in nonfuel prices. Over the year, prices for US imports soared 4.1% in April, while export prices inched 3% higher over the same period.
US PPI and Initial Jobless Claims
Among US fundamentals the PPI and Core PPI are the most important ones today. The PPI measure the average changes in price in primary markets of the US by producers of commodities in all states of processing. Changes in the PPI are widely followed as an indicator of commodity inflation. The Core PPI, however, exclude the Food and Energy sectors. Furthermore, the Initial Jobless Claims are due, same as every Thursday. They measure the number of people filing first-time claims for state unemployment insurance. In other words, it provides a measure of strength in the labor market.
USD/JPY set for another rally
The USD/JPY currency pair surprised with its performance once again, having breached the immediate resistance, thus, stabilizing above 114.00. However, due to the recent almost constant three-week rally, a bearish correction is bound to take place sooner or later, but according to technical indicators—today is no such case. With the weekly and the monthly R2s now providing immediate support, the Buck has the opportunity to even put the 115.00 level to the test, as the upper Bollinger band marks the possible intraday high, as well as the a psychological resistance area, which the given pair failed to pierce back in March.Daily chart
The USD/JPY pair remains within the borders of a broadening rising wedge, but with another trend-line preventing the exchange rate from reaching the pattern's upper border. As a result, risks of a sudden U-turn keep rising, which would imply that the main target, namely the two-year down-trend, could be left untouched for another period of time.
Hourly chart
There are 66% of traders holding short positions (previously 65%), while 51% of all pending orders are to acquire the US Dollar.
Right now 52% of OANDA clients are bulls, losing four percent from before, as the bullish sentiment has been holding around the same level for some time now. In the meantime, Saxo Bank clients manage to retain a neutral outlook towards the US Dollar, being that 52% of their open positions are now short and the remaining 48% are long.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between April 11 and May 11, traders expect the US Dollar to appreciate to 111.35 yen in three months' time, while the forecast for March 31 was 117.66 yen. It is also worth noticing that 58% of all forecasts fall above 111 yen, which is still below the current spot price. The majority of people who voted expect the US Dollar to cost somewhere between 112.50 and 114.00 yen in three months, with 19% of the survey participants choosing this trading ranges. At the same time, the second most popular interval was the 115.50-117.00 one, with 15% of survey participants forecasting this trading range.