- There is still no difference between the buy and sell orders
- Share of longs fell from 68 to 66%
- 200-hour SMA is at 102.80
- Short-term support trendline is at 102.50
- Two thirds of traders forecast stronger Dollar
- Upcoming events: FOMC Member Brainard Speech, BSI Manufacturing Index
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.
Japanese manufacturers to become less pessimistic
From the US side, the most important event will be FOMC Member Brainard Speech, the last Fed governor to speak. Potentially, this could prove to be important, since there is still no clear understanding in the market what to expect from the September 20-21 meeting, and Brainard could clarify position of the FOMC.Right before the midnight we will be looking forward to seeing results of the survey among large Japanese manufacturers, released by the Ministry of Finance. According to the latest forecasts, pessimism is to soften, as the index is expected to come in at minus 6.5 after minus 11.1 three months ago.
USD/JPY lingers near 55-day SMA
Although there has just been a test of the upper bound of the 10-month channel, the pair does not seem keen to leave its vicinity. The immediate resistance is at 102.70, represented by the weekly PP and 55-day SMA, but we allow for a rally to 103.50 without a threat to the bearish weekly outlook. The main question, however, remains—which of the key levels is going to be violated first. Whether it is going to be the resistance trendline at 103.50 or a dense demand area between 100.80 and 100.00.Daily chart
In the hourly chart we see USD/JPY ready for a rally from 102.50, which is the lower bound of the recently established ascending channel. However, the way up is currently obstructed by the 200-hour SMA at 102.80. However, if this level is broken, there will be no hurdles for the pair to reach 103.50.
Hourly chart
There are slightly less bulls in the market than last Friday, but the sentiment is strongly positive nevertheless. The share of longs fell from 68 to 66%. In the meantime, there is still no visible difference between the amount of buy and sell orders.
OANDA and Saxo Bank traders are slightly less optimistic with respect to the Greenback as well, but bulls are still in an undeniable majority. At the moment, 66% of Canada-based broker and 63% of Denmark-based clients are expecting to profit from appreciating Dollar.
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.