- 57% of all pending orders are to buy the Greenback
- 61% of all open positions are long
- Immediate resistance lies around 103.85
- The closest support rests around 102.75
- Upcoming events: US Services PMI, US Factory Orders, US Preliminary Nonfarm Productivity
As data released yesterday, US crude oil stockpiles advanced more than 14 million barrels during the previous week, showing the largest weekly build since the US Energy Department started keeping records back to 1982. As data suggests, West Texas Intermediate crude prices drop 1.13% with the report's release, stabilizing at $46.33. Brent prices, in turn, went down 1.42% at $47.92. Nevertheless, oil had rallied earlier on Wednesday on a sliding dollar, and after Colonial Pipeline had to shut down its main pipeline for a second time in as many months following an explosion. Overall, oil prices tumbled around 3% yesterday after a record weekly build in US crude stocks added to worries of all-time highs in OPEC production.
In the meantime, the deal in Doha fell apart as OPEC's biggest producer Saudi Arabia would not accept Iran's position that it is their sovereign right to increase output. The general purpose of the most recent meeting was to finalize details of supply cuts and how cartel members and non-members led by the Russia will share the cuts. Although, the non-OPEC members including Azerbaijan, Brazil, Kazakhstan, Mexico, Oman and Russia together produce 21% of global supply or around 19.6 million barrels each day.
US Services PMI, US Factory Orders and Nonfarm Productivity
From the US side the several events are due, such as the Preliminary Nonfarm Productivity. It shows the output per hour of labor worked. Nonfarm Productivity indicates the overall business health in the US, which has an influence on GDP. Another event will be the US Services PMI. It captures business conditions in the services sector. As the services sector dominates a large part of total GDP, the services PMI is an important indicator of the overall economic condition in the US. Finally, the US Factory Orders, which are a measure of the total orders of durable and non-durable goods such as shipments, inventories and orders at the manufacturing level, which can offer insight into inflation and growth in the manufacturing sector.USD/JPY to cross the 103.00 threshold
Demand for safe-haven currencies was higher on Wednesday, causing the USD/JPY currency pair to slump more than 85 pips, with volatility even reaching the 103.00 level. Another decline is likely to take place today, but this time with the 103.00 mark doubtfully limiting the losses. However, around the 102.75 level a rather tough demand area is located, represented by the weekly S2, the Bollinger band, the 55 and the 100-day SMAs. Altogether these levels could prevent the Buck from sustaining sharper losses, whereas a breach would trigger another sell-off, leading the exchange rate to the next support area around 102.00.Daily chart
As was anticipated, the US Dollar has been sliding down ever since the ascending channel was pierced to the downside on Tuesday. Moreover, a possible psychological support level was breached earlier today, suggesting the Greenback is to continue falling lower.
Hourly chart
Market sentiment suddenly turned bullish, with 61% of all open positions now being long (previously 42%). Meanwhile, 57% of all pending orders are to buy the Greenback, up from 48% on Wednesday.
Meanwhile, there has been an increase in the number of long positions at other brokers. Right now 57% of OANDA clients are bulls, compared to 53% on Wednesday. In the meantime, Saxo Bank clients are slightly more bullish than on Wednesday, being that the portion of longs now takes up 58% of the market.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar
According to the poll that gathered forecasts between October 03 and November 03, traders expect the US Dollar to appreciate to 105.66 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 77% of all forecasts fall above 102 yen, which is close to the current spot price. By far the most popular intervals are the 105.00-106.50 and the 108.00-109.50 ones, both chosen by 17% of all the surveyed, compared to popularity of the 103.50-105.00, 106.50-108.00 and 109.50-111.00 intervals.