- 53% of all pending orders are to sell the Buck
- 54% of traders have a positive outlook towards the US Dollar
- Immediate resistance lies at 108.70
- The closest support rests around 108.00
- Upcoming events: US Retail and Core Retail Sales, US Import Prices, US Empire State Manufacturing Index
The number of Americans filing for unemployment aid dropped more than expect last week, official figures showed on Thursday. According to the US Department of Labor, initial jobless claims fell 11,000 to 254,000 in the week ended November 4, down from the preceding week's 267,000 filings, while market analysts anticipated an increase of 2,000 to 267,000. This marked the 88th week of initial claims below the 300,000 level, the longest streak since 1973. The four-week moving average of claims increased 1,750 to 259,750 in the reported week. Thursday's data also showed that continuing claims grew 18,000 to 2,041,000 in the week ending October 29, whereas their four-week moving average declined to 2,039,500, the lowest level since July of 2000. After the release, the EUR/USD pair fell 0.09% to 1.0902, whereas it touched its highest level of 1.1298 on Wednesday after the results of the presidential race were announced.
Last week's initial jobless claims together with the NFP report released on Friday have strengthened odds for a December rate hike, despite Donald Trump's surprise victory in the US Presidential elections, which sent shockwaves across the world.
US Retail Sales and Import Price Index
Today there are some pieces of important US data, that could have an effect on the USD/JPY pair's performance. First of all, the US Census Bureau is to release the Retail Sales and Core Retail Sales figures. The Retail Sales measure the total receipts of retail stores. Monthly percent changes reflect the rate of changes of such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. In Core Retail Sales the automobile sector is excluded. Finally, the US Import Price Index is due, which informs the changes in the price of imported products into the US. The higher the cost of imported goods, the stronger the effect they will have on inflation, redunding in a higher probability of a rate rise.USD/JPY to take another shot at 108.70
As was anticipated, the US Dollar successfully outperformed the Japanese currency on Monday, with trade closing in between the monthly R2 and the weekly R1 resistance cluster. Although there are some downside risks, technical indicators keep suggesting the USD/JPY continue edging higher today. The monthly R2 and the Bollinger band form a relatively strong demand area around the 108.00 yen level, while the weekly R1 at 108.70 remains a solid resistance. However, the pair is seen eventually reaching the 110.75 mark, namely where the weekly R2 coincides with the monthly R3.Daily chart
Further USD/JPY appreciation is likely to be limited by the resistance line around the 109.00 psychological level, however, another up-trend around the 108.00 mark is expected to prevent the pair from declining. As a result, another rally is likely to take place, prolong the pair's bullish trend for now.
Hourly chart
There are only 54% of traders that have a positive outlook towards the US Dollar today, compared to 59% on Monday. Meanwhile, the portion of orders to sell the Greenback increased from 52 to 53%.
Meanwhile, there has been a decrease in the number of long positions at other brokers. Right now 54% of OANDA clients are bears, compared to 61% on Monday. In the meantime, Saxo Bank clients are slightly less bullish than on Monday, being that the portion of longs now takes up 50% 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 15 and November 15, traders expect the US Dollar to appreciate to 106.29 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 74% of all forecasts fall above 102 yen, which is close to the current spot price. The majority of people voted expect the US Dollar to cost somewhere between 111.00 and 112.50 yen in three months, with 23% of the survey participants choosing that trading range. Meanwhile, the second most popular intervals are the 99.00-100.50 and the 105.00-106.50 ones, both chosen by 13% of all the surveyed, compared to popularity of the 106.50-108.00, 108.00-109.50 and 109.50-111.00 intervals.