- The share of buy orders declined from 50 to only 49%
- 57% of traders have a positive outlook towards the US Dollar
- The nearest resistance is located around 103.74
- The closest support rests at 103.45
- Upcoming events: FOMC Members Dudley and George Speeches, US JOLTS Job Openings, FOMC Meeting Minutes
US employment growth slowed unexpectedly last month, official data revealed on Friday. According to the US Department of Labor, US private companies created 156,000 new jobs in September, while market analysts expected the economy to add 171,000 jobs in the reported month. Meanwhile, the previous month's reading was revised up to 167,000 from the originally reported gain of 151,000. Although the report suggested the economic expansion was still remaining on track, the chances of an interest rate hike at the Federal Reserve's policy meeting next month decreased markedly.
However, the odds of a December rate remained quite high, despite the disappointing, despite today's disappointing jobs report. The unemployment rate grew to 5.0% in September, as more Americans re-joined the labor force. Average hourly wages rose to an annualized rate of 2.6% last month, in line with analysts' expectations, whereas the average work week grew 0.1 to 34.4 hours. A broader measure of unemployment, which includes part-time workers and people who stopped searching for jobs, held steady at 9.7% in September. Professional and job services created 67,000, health care and restaurants added 33,000 and 30,000 jobs, respectively, contributing most to the September job growth.
FOMC Meeting Minutes
There is only one important event that could have an impact on the USD/JPY pair's performance on Wednesday, namely the FOMC Meeting Minutes. FOMC stands for the Federal Open Market Committee, that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.USD/JPY in limbo ahead of FOMC Minutes
For the second day this week the USD/JPY currency pair remained relatively flat, due to lack of a market mover. Today the Buck is located in a tight range between the 100-day SMA from the downside and the monthly R1 from the upside; however, trade is unlikely to remain within these borders. The FOMC Meeting Minutes are expected to cause volatility and, according to technical indicators, push the Greenback higher, with a chance to retake the 104.00 psychological level. On the other hand, we remain wary of the Fed being hawkish, thus, the weekly PP at 102.78 is the main intraday target.Daily chart
Tuesday's decline caused the pair to edge closer to the three-week up-trend, providing an additional confirmation for the bullish trend. According to the picture of the hourly chart, the USD/JPY pair is to edge higher today, contradicting with the daily outlook.
Hourly chart
Today 57% of traders have a positive outlook towards the US Dollar, compared to 58% on Tuesday. At the same time, the share of buy orders declined from 50 to only 49%.
Meanwhile, there has been a decrease in the number of long positions at other brokers. Right now 52% of OANDA clients are bulls, compared to 53% on Tuesday. Saxo Bank clients, however, are slightly more bullish than on Tuesday, being that the portion of longs now takes up 60% of the market.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar
According to the poll that gathered forecasts between September 12 and October 12, traders expect the US Dollar to appreciate to 104.78 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 79% of all forecasts fall above 102 yen, which is close to the current spot price. By far the most popular interval is 108.00-109.50, chosen by 18% of all the surveyed, compared to popularity of the 105.00-106.50, 106.50-108.00 and 109.50-111.00 intervals.