- 51% of orders are to acquire the US Dollar
- 56% of all open positions are short
- The nearest resistance is at 111.78
- Immediate support rests at 111.41
- Upcoming events: Canadian CPI
The number of Americans filing for unemployment benefits dropped unexpectedly last month, official figures revealed on Thursday. The US Department of Labour reported that initial jobless claims fell to 232K in the week ending May 12, following the preceding week's 236K and posting the third consecutive decline. In the meantime, analysts held expectations for an increase to 240K. Claims remained below the 300K level for 115 straight weeks, the longest stretch since 1973.
The number of continuous claims fell 22K to 1.90M during the week ended May 5, the lowest since November 1988. Back in April, US private companies created 211K jobs, roughly meeting analysts' expectations. Other data released on Thursday showed that manufacturing activity in Philadelphia jumped to 38.8 points in May, up from the preceding month's 22.0, whereas analysts anticipated a slight decrease to 19.9. More than half of market participants expect the Federal Reserve to raise rates next month. However, uncertainties tied to the US President Donald Trump and Russia may lower significantly the chances of a June rate hike.
Minor US data
On the calendars on Friday there is only one data release scheduled. That is the Canadian CPI, which is not going to affect any of the major financial instruments. However, the Canadian CPI release is a strong enough macroeconomic data release, which might impact the USD/CAD pair. The data will be released at 12:30 GMT.
USD/JPY steady in this trading session
Yesterday, the US Dollar managed to regain some losses after the massive plummet on Wednesday. However, it seems that traders are once again looking in the direction of the save-haven currency. The nearest support formed by the weekly S2 at 111.41 may hinder the rate from trading lower; however, it may not be strong enough to halt it, thus leading the pair to the 111.30 territory. In case the Greenback manages to push north, a penetration of the 100-day at 111.77 might indicate that the currency has finally recovered from the latest political turmoil. This scenario is confirmed by bullish short-term technical indicators.Daily chart
The hourly chart shows that the previous support line has begun to provide resistance to the currency exchange rate. Due to that fact a chance of a rebound is limited for the US Dollar, and the pair is most likely going to decline in the near future.
Hourly chart
Market sentiment remains bearish, as 56% of open positions are short. Meanwhile, 51% of pending orders are to buy the US Dollar.
Right now 57% of OANDA clients are bulls, remaining in a bull dominance situation. In the meantime, Saxo Bank clients have also increased their long position amount, as 60% of open positions are bullish.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between April 19 and May 19, traders expect the US Dollar to appreciate to 111.60 yen in three months' time, while the forecast for March 31 was 117.66 yen. It is also worth noticing that 56% 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 16% of the survey participants choosing this trading ranges.