- 56% of all pending orders are to purchase the Buck
- 54% of traders remain short the US Dollar
- Immediate resistance lies at 118.22
- The closest support rests at 117.39
- Upcoming Events: US Pending Home Sales, US Initial Jobless Claims, US Goods Trade Balance, US Crude Oil Inventories
Americans became more optimistic about the economy in December since the postelection bump in confidence continues. As data suggest the US consumer confidence reached its highest in more than 15 years during the previous week as Americans expect more strength ahead in business conditions, stock prices and the job market following the election of Donald Trump as president in November. According to the Conference Board the Consumer Confidence Index advanced to 113.7 in December from an upwardly revised 109.4 in November. Meanwhile, the data topped estimates in a Reuters poll for a reading of 109.0. Another reason for the gain in confidence is surging optimism among older Americans. Economists follow confidence indicators because upbeat consumers are more likely to increase personal spending, which makes up most of the US economy.
In the meantime, house prices continued their steady recovery in October, as another spike in borrowing costs after Donald Trump's victory.
US Pending Home Sales is the only event
Wednesday brings only one relevant event, namely the US Pending Home Sales. Released by the National Association of Realtors, it is a leading indicator of trends of the housing market in the US. It captures residential housing contract activity of existing single-family homes. As the housing market is considered as a sensitive factor to the US economy. It generates some volatility for the USD.USD/JPY sets eye on 118.00
Demand, represented by the 117.00 major level, appears to have been sufficient to prevent the USD/JPY pair from suffering more losses yesterday, as it did during the previous week. The Buck added 31 pips against the Japanese Yen, successfully climbing over the immediate resistance, namely the weekly PP. The pair now has the potential to post more gains, and technical indicators are bolstering this possibility, as they retain bullish signals. However, the nearest resistance, formed by the weekly R1, is unlikely to be reached due to lack of impetus. Furthermore, the 118.00 mark is expected to prevent further appreciation, as it did last week.Daily chart
The up-trend on the hourly chart slightly differs from the one on the daily chart, as here the pair remains support by it. The 200-hour SMA now shifted lower, bolstering the trend-line, making it more difficult for the USD/JPY pair to trade in the red zone today.
Hourly chart
For the third consecutive day 54% of traders remain short the US Dollar. At the same time, there are 56% of orders to purchase the Buck.
Right now 54% of OANDA clients are bears, unchanged since Tuesday. In the meantime, Saxo Bank traders have become neutral, being that their sentiment is equally divided between the bulls and the bears.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between November 28 and December 28, traders expect the US Dollar to appreciate to 117.8 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 60% of all forecasts fall above 117 yen, which is close to the current spot price. The majority of people voted expect the US Dollar to cost somewhere between 120.00 and 121.50 yen in three months, with 18% of the survey participants choosing this trading range. At the same time, the second most popular interval was the 118.50-120.00 one, with 14% of survey participants choosing it.