- 62% of traders have positive outlook towards the Buck
- The number of orders to acquire the US currency fell to 46%
- The weekly S2 and the Bollinger band form support around 100.45
- The closest resistance rests around 100.80
- Upcoming events: US Markit Manufacturing PMI
The number of Americans filing for unemployment benefits fell sharply last week, official figures revealed on Thursday. According to the US Department of Labor, initial claims for jobless benefits dropped 8,000 to a seasonally adjusted rate of 252,000 in the week ended September 16, touching the lowest level since mid-July. Meanwhile, market analysts expected initial jobless claims to rise to 261,000 last week from the preceding week's 260,000. Filings for US unemployment benefits remained below the 300,000 level for the 81st consecutive week, the longest streak since 1973. The four-week moving average of initial claims, considered a better measure of labor market trends, declined 2,250 to 258,500 last week. The US Dollar Index, which measures its strength against a trade-weighted basket of six major currencies, fell 0.45% to 95.03, the lowest level since September 12, despite upbeat data.
Other data released by the National Association of Realtors (NAR) showed sales of previously owned US homes unexpectedly declined to a seasonally adjusted annual rate of 5.33 million units in August, following the previous month's 5.38 million unit pace and falling behind the 5.45 million unit rate market forecast. The drop was mainly driven by a shortage of properties for sale as it lifted home prices higher.
US Markit Manufacturing PMI is the only driver
On Friday there is only one relevant event that could have some impact on the USD/JPY pair's performance, namely the US Markit Manufacturing PMI. The Manufacturing PMI is released by Markit Economics and captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the manufacturing PMI is an important indicator of business conditions and the overall economic condition in the US. Readings above 50 imply the economy is expanding, making investors understood it as a bullish for the USD, whereas a result below 50 points for an economic contraction, and weighs negatively on the currency.USD/JPY attempts to retake 101.00
After a sharp slump on Wednesday the US Dollar succeeded in partially recovering, but the resistance area around 100.80 limited the gains. Today technical indicators keep suggesting the Greenback is to suffer more losses against the Japanese Yen, with the lower limit still being the 100.00 major level, despite the weekly S2 and the Bollinger band forming support at 100.45. However, bulls appear to be refusing to give up, pushing the USD/JPY currency pair higher. In this case gains are likely to be limited by the 101.37 level, namely the weekly S1.Daily chart
The USD/JPY currency pair began to recover yesterday after Wednesday's sharp slump, but it is uncertain whether the bullish momentum will be able to last until the down-trend is reached. The pair risks experiencing more weakness prior to that, with the main resistance being the 200-hour SMA. The 50% Fibo is the only level to attempt to limit the losses; a fail to rebound from the Fibo would imply a decline towards 100.00.
Hourly chart
SWFX traders' sentiment barely changed over the day, as 62% of traders now have positive outlook towards the Buck (previously 63%). At the same time, the number of orders to acquire the US currency lost 14% points, having fallen to 46%.
There has been an increase in the number of long positions at other brokers as well. Right now 71% of OANDA clients are bulls, down from 73% recorded on Thursday. Saxo Bank clients, however, are slightly less bullish than on Thursday, being that the portion of longs decreased from 69 to 68%.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar
According to the poll that gathered forecasts between August 23 and September 23, traders expect the US Dollar to appreciate to 105.50 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 80% of all forecasts fall above 102 yen, which is the current spot price. By far the most popular interval is 109.50-111.00, chosen by 20% of all the surveyed, compared to popularity of the 102.00-103.50, 103.50-105.00, 105.00-106.50 and 106.50-108.00 intervals.