- 63% of all pending orders are to buy the Buck
- 63% of all open positions are long
- The weekly PP forms resistance at 100.33
- The closest support rests around 100.80
- Upcoming events: US New Home Sales, Japanese Monetary Policy Meeting Minutes, US Markit Services PMI, US CB Consumer Confidence, FOMC Member Fischer Speech
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 New Home Sales is the only relevant event today
There is only one important event on Monday that can influence the USD/JPY pair, namely the US New Home Sales. The number of New Home Sales released is released by the US Census Bureau. It is an important measure of housing market conditions. House buyers spend money on furnishing and financing their homes so as a result the demand for goods, services and employees is stimulated. Generally, a high reading is seen as bullish for the USD, whereas a low reading is seen as bearish. Early tomorrow the Japanese Meeting Minutes are due. It is a detailed record of the BoJ Policy Board's meeting, providing more insight into the economic conditions and future interest rate decisions.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
For a short duration the 50% Fibo managed to keep the USD/JPY pair afloat, but ultimately the Buck is expected to edge lower. As mentioned in the daily outlook, the main target is the 100.00 psychological level, where a rebound is likely to take place.
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 a decrease in the number of long positions at other brokers as well. Right now 69% of OANDA clients are bulls, down from 71% recorded on Friday. Saxo Bank clients, however, are slightly more bullish than on Friday, being that the portion of longs increased from 68 to 69%.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar
According to the poll that gathered forecasts between August 26 and September 26, traders expect the US Dollar to appreciate to 106.03 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 24% 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.