- Orders are almost evenly distributed between the buy (48%) and sell (52%) ones
- 64% of traders expect the Greenback to appreciate
- Price should have no trouble rising towards the weekly and monthly R1s at 104.94/79
- Support is at 103.00/102.81
- 61% of the survey participants expect the US Dollar to cost less than 105.00 yen in three months
- Upcoming events: US ISM Non-Manufacturing PMI
Fewer jobs were created than expected in the United States last month, official data revealed on Friday. According to the Labor Department, total nonfarm payroll employment in the country jumped 151,000 in August, following July's upwardly revised gain of 275,000, whereas market analysts expected the economy to add 180,000 new jobs in the reported month. Over the past three months, job gains averaged 232,000, compared with 182,000 for the first eight months of 2016. Furthermore, average hourly earnings advanced 0.1%, down from July's 0.3%, while the average workweek dropped to 34.3 hours in the same month from July's 34.4, leading to a 0.2% decline in the index of aggregate weekly hours. Over the past month, job growth in construction and manufacturing was weak, while strong in retail, healthcare, leisure, and government sectors.
The headline unemployment rate remained unchanged at 4.9%, whereas economic desks anticipated a slight deceleration to 4.8% during the reported period. Average hourly earnings held steady at 2.4% in the same month. On Wednesday, payroll processor ADP said US companies created 177,000 new jobs in August, slightly surpassing the 174,000 market forecast. The report put into question the possibility of an interest rate increase by the Federal Reserve at its September meeting.
US service sector to keep expanding at a healthy pace
Yesterday the currency pair was mainly driven by Haruhiko Kuroda's lack of commitment to more easing by the Bank of Japan, as a result of which the Yen strengthened. Today the lead should be taken over by the United States Dollar, as US traders return from the holiday, and their activity will be fostered by the US ISM Non-Manufacturing PMI, which has remained comfortably above 50 since the beginning of 2010. Today's reading is expected to come in at 55.4 after 55.5 seen a month earlier.USD/JPY aims for 105 yen
The setup has become even more bullish for USD/JPY than it was yesterday, as the currency pair has confirmed the broken trendline, meaning the US Dollar is willing to keep advancing north. The first target is the latest September 2 high, but the price should have no trouble rising towards the weekly and monthly R1s at 104.94/79, considering the daily technical indicators. Additional resistance is at 105.29, represented by the 100-day SMA, while support is at 103.00/102.81, and it may not be long before this demand area comes into play, as weekly indicators are mostly giving ‘sell' signals.Daily chart
In the hourly chart we also see a clear confirmation of the recently broken trendline, which adds to the bullish pressure. Here the closest resistance is the newly established falling resistance line at 103.60, but this should not impact the overall picture of strengthening Dollar.
Hourly chart
SWFX sentiment remains bullish, with 64% of traders expecting the Greenback to appreciate. Meanwhile, orders are almost evenly distributed between the buy (48%) and sell (52%) ones.
OANDA and Saxo Bank traders have a similar outlook on the pair. At the moment, 61% of the Canada-based broker and 60% of the Denmark-based broker clients are long the US Dollar.
Spreads (avg, pip) / Trading volume / Volatility
More than a half expect the exchange rate to fall below 105.00 yen
Slightly more than half of the surveyed (61%) now assume that the US Dollar is to cost less than 105.00 yen after a three month time. The most popular choice, however, implies that the Greenback is to cost between 108.00 and 109.50 yen in three months, selected by 17% of the voters. According to the votes collected between Aug 02 and Sep 02, the mean forecast for December 02 is 103.43. At the same time, 13% of the surveyed believe the Greenback could cost either between 103.50 and 105.00 yen or even more than 109.50 yen in three months.