- The number of buy orders edge down from 68 to 65%
- 53% of traders hold short positions
- Immediate resistance lies around 115.00
- The closest support rests around 113.50
- Upcoming events: US Retail and Core Retail Sales, US PPI and Core PPI, US Preliminary UoM Consumer Sentiment
The number of Americans filing for unemployment aid advanced less than expected last week, official figures showed on Thursday. According to the Labor Department, initial claims rose 10,000 to 247,000 during the week ending January 7. This marked the 97th consecutive week that claims remained below the 300,000 level, the longest streak since 1973. Thursday's report also showed that continuous claims dropped 29,000 to 2.09 million in the last week of 2016. Separately, the Labor Department reported that import prices climbed 0.4% in December, following the previous month's 0.2% decline. The increase was mainly driven by rising petroleum prices that jumped 7.9% during the reported period. On an annual basis, import prices increased 1.8%, the biggest rise since March 2012, after climbing 0.1% year-over-year in November.
Meanwhile, excluding petroleum, prices dropped 0.2% month-over-month in December, compared to the prior month's unchanged reading. The stronger US Dollar was the major reason behind the December decline. Over the last year, the Greenback appreciated greatly against the currencies of the US main trading partners, advancing 4.4%. Though it experienced the largest gains in the wake of Donald Trump's election. The major US stock markets ignored today's positive data, following Trump's disappointing press conference.
US Retail Sales and PPI are the main events today
Once again all focus turns to the US fundamentals. First of all, the US Retail Sales, which 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. The Core Retail Sales, however, exclude the automobile sector. Another important event will be the US PPI, as it measure the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Changes in the PPI are widely followed as an indicator of commodity inflation, while the Core reading excludes volatile products, such as food and energy, in order to capture an accurate calculation.USD/JPY in limbo ahead of US data
The US Dollar weakened against the Japanese Yen for the fourth consecutive day yesterday, as the immediate support lacked the strength to limit the losses. At this point it is quite difficult for the Greenback to outperform the Yen, as trade opened just under the Bollinger band and the weekly S1 resistance area. Moreover, a possible down-trend rests at 115.92, just under the monthly PP, which kept the pair at bay for two weeks now; however, the trend-line requires an additional confirmation to be fully realised, which a 120-pip rally could provide. Nevertheless, risks are still skewed to the downside, with the monthly S1 at 113.74 being the closest supportDaily chart
The 23.60% Fibo was sufficient to help the US Dollar partially recovery yesterday, but the pair appears to be reluctant to maintain trade above the 115.00 mark. A successful rally is to reconfirm the down-trend, where the exchange rate is expected to bounce back again, unless the trend-line is weakened by the 200-hour SMA moving further away from it.
Hourly chart
There are now 53% of traders holding short positions (previously 46%). Meanwhile, the number of buy orders edge down from 68 to 65%.
Right now 54% of OANDA clients are bears, compared to 53% on Wednesday. In the meantime, Saxo Bank clients have bulls gaining numbers, being that 53% of their open positions are now long and the remaining 47% are short.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between December 13 and January 13, traders expect the US Dollar to appreciate to 119.25 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 67% 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 123.00 and 124.50 yen in three months, with 19% of the survey participants choosing this trading range. At the same time, the second most popular intervals were the 114.00-115.50 and the 120.00-121.50 ones, with 14% of survey participants choosing each of them.