- 63% of all pending orders are to sell the US Dollar
- 59% of all open positions are long
- The nearest resistance significant resistance is near 110.10
- The 109.22 mark is a strong support
- Upcoming events: US Initial Jobless Claims, US Final Wholesale Inventories
As was anticipated, the US Dollar outperformed the Japanese Yen on Wednesday, with the exchange rate nearing the 110.00 mark. Another rally today would confirm the birth of a new ascending channel, but technical indicators imply the Greenback is to sustain heavy losses. The key support is still the monthly S1 at 109.22, which should be sufficient to limit the losses. In case this area fails, the next target would become the trend-line around 108.80.
Nevertheless, due to the falling wedge getting pierced to the upside yesterday, a small possibility of the USD/JPY pair resuming its bullish trend exists. On the other hand, no other signs point to a potential recovery, thus, risks remain skewed to the downside.
US Initial Jobless Claims are the only relevant event today
Thursday does not bring a large number of fundamental events that could influence the USD/JPY pair,. The US Initial Jobless Claims are basically the only relevant event. They are a measure of the number of people filing first-time claims for state unemployment insurance. In other words, it provides a measure of strength in the labor market. A larger than expected number indicates weakness in this market, which influences the strength and direction of the US economy. The impact from the Jobless Claims is usually very limited, thus, no significant changes are expected.
USD/JPY risks falling uder 109.00
As was anticipated, the US Dollar outperformed the Japanese Yen on Wednesday, with the exchange rate nearing the 110.00 mark. Another rally today would confirm the birth of a new ascending channel, but technical indicators imply the Greenback is to sustain heavy losses. The key support is still the monthly S1 at 109.22, which should be sufficient to limit the losses. In case this area fails, the next target would become the trend-line around 108.80. Nevertheless, due to the falling wedge getting pierced to the upside yesterday, a small possibility of the USD/JPY pair resuming its bullish trend exists. On the other hand, no other signs point to a potential recovery, thus, risks remain skewed to the downside.Hourly chart
With the breach of the triangle pattern's support line, the Buck risks experiencing sharper losses against the Yen. The monthly S1 at 109.22 keeps providing support for now, a breach of which would likely lead to a drop towards the 108.00 handle – the next target.
Daily chart
Traders' sentiment turned bullish today, with 59% of all open positions now being long and the other 41% - short. Meanwhile, there are 63% of all pending orders set to sell the Greenback.
At the moment, 62% of OANDA clients are long the US Dollar against the Yen, while the remaining 38% are short. In addition, Saxo Bank clients' sentiment remained unchanged over the day, as 62% of their open positions are now long.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between May 08 and June 08, traders expect the US Dollar to appreciate to 112.74 yen in three months' time, while the forecast for March 31 was 117.66 yen. It is also worth noticing that 65% of all forecasts fall above 111 yen, which is above the current spot price. The majority of people who voted expect the US Dollar to cost somewhere either between 112.50 and 114.00 or between 115.50-117.00 yen in three months, with 18% of survey participants choosing each of these trading ranges. Furthermore, the 114.00-115.50 range was the second most popular one, with 13% of the voters choosing it.