- 67% of traders have a negative outlook towards the US Dollar
- The share of sell orders rose to 58%
- Immediate resistance lies around 113.90
- The closest support rests at 112.15
- Upcoming events: Tokyo Core CPI, Japanese SPPI, US Goods Trade Balance, US Markit Services PMI
New orders for US manufactured durable goods rose markedly last month, driven by higher demand for machinery and other equipment, official figures revealed on Wednesday. Overall, new orders for capital goods jumped 4.8% in October, according to the US Department of Commerce. Meanwhile, market analysts anticipated a slight acceleration to 1.2%. The September figure was revised down from -0.1% to -0.3%. Demand for transportation equipment jumped 12% during the reported month, the largest gain since October 2015. Back in September, new orders for transportation equipment climbed 0.4%. Excluding orders tied to transportation, core durable goods orders increased 1.0%, following September's downwardly revised gain of 0.1% and surpassing the 0.2% rise market forecast. The US economy is set to expand at a 3.6% annual pace in the Q3, after growing 2.9% in the previous quarter.
Separately, the Department of Labor reported on Wednesday the number of Americans filing for unemployment benefits increased to 251,000 in the week ending November 18, up from the prior week's 233,000, whereas analysts expected a milder rise to 241,000.
A quiet end of the week
Due to there being a bank holiday in the US today, all focus shifts to the Japanese data, such as the Tokyo Core CPI. It is a measure of price movements obtained by comparison of the retail prices of a representative shopping basket of goods and services, excluding fresh food. The index captures inflation in Tokyo. The purchase power of JPY is dragged down by inflation. Generally, a high reading is seen as positive for the JPY.USD/JPY to reclaim 113.00
Wednesday was a rather productive day for the USD/JPY currency pair, being that it rallied more than 100 pips and, thus, preserved the ascending channel pattern. Consequently, another close in the green zone is the anticipated outcome today, with weekly R2, the channel's upper border, the Bollinger band and the 23.60% Fibo forming a strong resistance area around 113.90. This cluster is expected to be difficult to overcome, but a successful breach is likely to allow the Buck to prolong its bullish momentum. Meanwhile, technical indicators are bolstering the possibility of the positive outcome, as they retain bullish signals.Daily chart
Despite a breakout attempt, the USD/JPY's exchange rate managed to return within the borders of an ascending channel pattern yesterday, but with the 113.00 threshold remaining intact. On the hourly chart the 23.60% Fibo also represents resistance, located at the 114.00 major level, which could be difficult to pierce. Nonetheless, the bullish trend is unlikely to be broken today.
Hourly chart
For the third consecutive day there are 67% of traders with a negative outlook towards the US Dollar. At the same time, the share of sell orders added 4% points, having risen to 58%.
Meanwhile, there has been a small increase in the number of long positions at other brokers. Right now 57% of OANDA clients are bears, compared to 62% on Wednesday. In the meantime, Saxo Bank clients are still slightly on the bearish side, being that the portion of shorts takes up 53% 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 24 and November 24, traders expect the US Dollar to appreciate to 108.09 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 51% of all forecasts fall below 108 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 20% of the survey participants choosing that trading range. Meanwhile, the second most popular interval is the 105.00-106.50 one, chosen by 15% of all the surveyed, compared to popularity of the 106.50-108.00, 108.00-109.50 and 109.50-111.00 intervals.