- 49% are buy and 51% are sell ordres
- Share of bulls increased further to 68%
- Rallies to be limited by 55-day SMA
- 100.80/70 is still a viable target
- Two thirds of traders forecast stronger Dollar
- Upcoming events: FOMC Member Rosengren Speech
The number of Americans filing for unemployment benefits dropped unexpectedly last week, official data revealed on Thursday. According to the Labor Department, initial jobless claims fell 4,000 to a seasonally adjusted 259,000 in the week ended September 3, touching the lowest level since mid-July and following the preceding week's reading of 263,000. Market analysts anticipated a slight increase to 264,000 filings in the reported period. Last week's numbers market the 79th consecutive week of initial jobless claims remaining below the 300,000 level, the longest streak since 1973. There were no special factors influencing last week's claims data; however, jobless claims for Virginia, New Mexico, Alabama, Minnesota, Hawaii and Puerto Rico were estimated amid the Labor Day celebrated on Monday.
Furthermore, the four-week moving average of initial jobless claims, considered a better measure of labor market trends, declined 1,750 to 261,250 during the same week. Meanwhile, the number of continuing jobless claims dropped 7,000 to 2.14 million in the week ending August 27, whereas the four-week moving average of continuing claims decreased 4,000 to 2.15 million. The claims data together with the latest JOLTS report suggest that the trend in employment growth remains strong.
Fundamentals to play a secondary role
Today USD/JPY is likely to be in correction/consolidation phase following the 0.9% surge during the middle of Thursday, as there are hardly any events that could either accelerate or reverse the yesterday's move. The only event worth following today is the speech of the FOMC Member Rosengren, who is to address audience on the matter of economic forecasts.USD/JPY stays under 55-day SMA
Although yesterday in the morning the upside seemed limited, the price managed to mount 102 yen, thus closing above the monthly PP and alleviating some downward pressure. Nevertheless, the 55-day SMA stays intact, suggesting the near-term outlook remains negative and 100.80/70 is still a viable target. This support mainly consists of the 50% retracement of the 2012-2015 rally and monthly S1. Additional strong demand is seen at 100 yen, and for the time being this we consider to be the floor.Daily chart
In the hourly chart USD/JPY is poised to fall some 40 points more after it topped out at 102.60. At 101.80 the price will be supported by the recently established trendline, and it may well not let the rate retest the four-week line at 101.10. In the meantime, rallies are to be limited by the 200-hour SMA at 102.80.
Hourly chart
Apparently, bulls were encouraged by Dollar's performance, as their share increased further to 68% of the market. There is no consensus among the orders, however, since 49% are buy and 51% are sell commands.
The shares of longs at OANDA and Saxo Bank are just a fraction lower, but the idea is the same - about two thirds of positions open both at the Canada- and Denmark-based brokers are long, implying that the the Greenback is close to being overbought and that there is little room for new buyers to enter the market and thus push the price higher from the current levels.
Spreads (avg, pip) / Trading volume / Volatility
Two thirds of traders forecast stronger Dollar
Traders are generally bullish on USD/JPY. Considering that the currency pair is currently trading circa 102 yen, two thirds of them expect the US Dollar to become more expensive in three months, and the rest expect the Greenback to become cheaper. The average forecast for December 8 is 103.88, while the most likely price interval is considered to be 108.00-109.50, which was chosen by 17% of the surveyed.