- The portion of buy orders slid from 56 to 55%
- 52% of all open positions are short
- The nearest resistance is located around 105.50
- The closest support rests at 105.01
- Upcoming events: US GDP Annualized, US Reuters/Michigan Consumer Sentiment, US GDP Price Index, US Personal and Core Personal Consumption Expenditures Prices
New orders for US manufactured durable goods dropped unexpectedly last month amid lower orders for computers and electronic products. According to the US Department of Commerce, new orders for capital goods fell 0.1% in September, the most since February, after rising 0.1% in August, whereas analysts had expectations for a 0.1% increase. Meanwhile, orders for core durable goods advanced 0.2% in the same month, following August's 0.2% decline and meeting analysts' forecasts. Other data released by the National Association of Realtors on Thursday showed the Pending Home Sales Index climbed 1.5% to 110.0 in September after falling 2.5% to 108.4 in the preceding month, while economists anticipated an acceleration of 1.2%. Moreover, the Index jumped 2.4% compared with the same month a year ago.
In the meantime, the Department of Labor said the number of Americans filing for unemployment benefits dropped to 258,000 in the week ended October 21, compared to the previous week's revised up 261,000 claims. That marked 86 consecutive weeks of claims below the 300,000 level, the longest streak since 1973. Also, the number of continuing claims declined to 2.04 million in the week ending October 15.
US GDP Annualized is the main event today
Today all attention shifts to the US figures, with the most anticipated one being the US GDP Annualized. It shows monetary value of all the goods, services and structures produced within a country in a given period of time. GDP Annualized is a gross measure of market activity, because it indicates the pace at which a country's economy is growing or decreasing. Another important release will be the GDP Price Index. It gauges the change in the prices of goods and services. Changes in the GDP Price Index are followed as an indicator of inflationary pressure that may anticipate interest rates to rise. Finally, the US Personal Consumption Expenditures, which measure price changes in consumer goods and services. Personal Consumption Expenditures consist of the actual and imputed expenditures of households; the measure includes data pertaining to durables, non-durables and services. It is essentially a measure of goods and services targeted toward individuals and consumed by individuals. Meanwhile, the Core Personal Consumption Expenditures is also considered as an important indicator of inflation.USD/JPY on the edge of falling under 105.00
Relatively strong US data yesterday helped the Greenback to strengthen against the Yen, therefore, to preserve the bullish trend. Moreover, the USD/JPY currency pair managed to reclaim the 105.00 major level yesterday, which was bolstered by the weekly R2. Now the pair faces another strong resistance around 105.50, represented by the Bollinger band and the weekly R3. Furthermore, for the first time this week technical indicators in the daily timeframe are no longer giving bullish signals, adding weight to the bearish side of the scales. Consequently, the up-trend around 104.50 is likely to be the bottom floor, also reinforced by the weekly R1.Daily chart
The ascending channel pattern on the hourly chart has been slightly adjusted, now showing a much clearer picture. Price reached the upper border yesterday, now expected to bounce back and move towards the lower border. The picture on the hourly chart supports the outlook of the daily one, increasing the chances of the bearish scenario.
Hourly chart
Traders' sentiment shifted to the bearish side today, as 52% of all open positions are short. The portion of buy orders slid from 56 to 55%.
Meanwhile, there has been a decrease in the number of long positions at other brokers. Right now 51% of OANDA clients are bulls, compared to 54% on Thursday. Meanwhile, Saxo Bank clients are slightly less bullish than on Thursday, being that the portion of longs now takes up 52% 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 28 and October 28, traders expect the US Dollar to appreciate to 105.63 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 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.