USD/JPY struggles to remain above 101.00

Source: Dukascopy Bank SA
  • The portion of buy orders increased from 47 to 60%
  • Bullish traders' sentiment returned to its Wednesday's level of 64%
  • The weekly PP and the 20-day SMA form resistance around 101.50
  • The closest support rests around 100.80
  • Upcoming events: US Core PCE Price Index, US Personal Spending and Income, Chicago PMI, US Revised UoM Consumer Sentiment

The number of Americans filing for unemployment benefits rose less than expected, official figures revealed on Thursday. According to the US Department of Labor, the number of claimants jumped 3,000 to a seasonally adjusted rate of 254,000 in the week ended September 24 after touching the lowest level since mid-July in the previous seven days. Meanwhile, market analysts anticipated an increase to 260,000 claims in the week ending September 24, following the preceding week's 251,000. Filings for US unemployment benefits remained below the 300,000 level for the 82nd 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 256,000 last week. Furthermore, so-called continuing claims dropped 46,000 to 2.062 million in the week ended September 17.

According to the final Q2 GDP print released by the Department of Commerce the US economy expanded at an inflation-adjusted 1.4% seasonally adjusted annual rate in the Q2 after growing 0.8% in the Q1. Economists expected the Q2 GDP to increase 1.3%. The US Dollar Index advanced to 95.49 from 95.42 ahead of the release.

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US Core PCE Price Index, US Personal Spending and Income

On the last day of the week (and the month) there are not many events to have an impact on the USD/JPY pair, but attention could still be paid to the US Core PCE Price Index and US Personal Spending and Income. The US Core PCE Price Index is an average amount of money that consumers spend in a month. "Core" excludes seasonally volatile products, such as food and energy, in order to capture an accurate calculation of the expenditure. It is a significant indicator of inflation. At the same time, the US Personal Spending measures purchases of goods and services by households and by non-profit institutions that serve households from private business, whereas Personal income measure the total income received by individuals from all sources, including wages and salaries, interest, dividends, rent and transfer payments. This figure can provide insight on the US employment situation..



USD/JPY struggles to remain above 101.00

The USD/JPY pair erased most of intraday gains yesterday, but still managed to close trade above the 101.00 major level. Once again having put the 20-day SMA to the test earlier today, the Greenback was unable to maintain trade above 101.50. This could be a sign of potential weakness, which technical studies are in favour of. The immediate support area, located around 100.80, is unlikely to limit the losses if bears take over today; instead, the 100.32 is the main target, as it kept the pair afloat for two weeks in a row now. Overall, another bullish development will not change the whole picture for the Dollar/Yen, as the bearish trend is to remain intact.

Daily chart

© Dukascopy Bank SA

Strong US GDP Figures caused the USD/JPY pair to approach the down-trend once again, but with the price quickly retreating from such highs. The pair appears to be unable to keep trading above 101.00, with the bearish trend constantly prevailing and pushing the USD/JPY constantly lower.

Hourly chart
© Dukascopy Bank SA


Bulls enhance advantage

Bullish traders' sentiment returned to its Wednesday's level of 64%, whereas the portion of buy orders increased from 47 to 60%.

Meanwhile, there has been a decrease in the number of long positions at other brokers. Right now 69% of OANDA clients are bulls, down from 70% recorded on Thursday. Saxo Bank clients, however, became less bullish than on Thursday, being that the portion of longs now takes up 66% of the market.


Spreads (avg, pip) / Trading volume / Volatility

Traders are becoming increasingly bullish the Dollar

© Dukascopy Bank SA

According to the poll that gathered forecasts between August 30 and September 30, traders expect the US Dollar to appreciate to 105.78 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 81% 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 21% of all the surveyed, compared to popularity of the 105.00-106.50, 106.50-108.00 and 108.00-109.50 intervals.

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