- 52% of pending orders are to sell the US Dollar
- 57% of all open positions are short
- The nearest significant resistance is around 114.34
- Downside potential down to 113.20
- Upcoming Events: G20 meetings, US Average Hourly Earnings m/m, US Non-Farm Employment Change, US Unemployment Rate, Fed Monetary Policy Report
The US private sector created less jobs than expected last month, suggesting that the labour market was cooling after oversized gains registered earlier. The ADP National Employment Report released on Thursday showed companies added 158,000 new jobs to the economy in June, following the preceding month's downwardly revised figure of 230,000 and surpassing analysts' expectations for an 185,000 increase.
The second-weakest report within this year signify that businesses decided to hold off expansion plans until the Trump's administration plans are realised. Moreover, experts suggested that companies would continue to face difficulties of finding skilled workers as the labour market is expected to tighten even further. The report was watched closely by the Federal Reserve, which remained curious about job creation as well as its effects on wage growth. In addition, a growth in inflation is expected to reflect a rise in salaries, fueling the US economic recovery. Notwithstanding the insufficient inflationary pressures, the Fed is likely to raise interest rates at least one more time in 2017.
Busy Economic Calendar
The main political event for the following two days will be the G20 Summit in Hamburg, Germany. In terms of data releases, the United States are to release three sets of data at 1230GMT, namely, the monthly average hourly earnings, non-farm employment change and the unemployment rate. In addition, the Fed is to publish its Monetary Policy Report at 1500GMT.
USD/JPY approaches monthly R1
On Thursday, USD/JPY failed to form a distinctive trend either direction, thus remaining in the 112.90/113.44 range the whole trading session and being supported by the 100-hour SMA. Nevertheless, the stillness of the market was disrupted by a sudden 49-pip surge early on Friday. The given move shifted tremendously indicator readings that became strongly bullish. It is expected that the given upward momentum might maintain for several hours; however, the monthly R1 at 113.90 could resist any attempts to move the rate north. The base scenario favours the US Dollar appreciating against the Yen in short term, but reversing somewhere near the two-month high at 114.34.Hourly chart
The Greenback has approached a resistance level set by the monthly R1 at 113.94. It is unlikely, however, that this level is surpassed in this trading session. On the downside, the pair faces a distant support cluster formed by the 100-, 55, 200- and 20-hour SMAs and the monthly PP in the 111.00/112.00 area.
Daily chart
SWFX market sentiment is bearish, as 57% of all open positions are short, compared to 55% on Wednesday. In addition, 52% of pending orders are to sell the Greenback.
Traders at OANDA remain bullish on the US Dollar, as 52% of open positions are long. Meanwhile, Saxo Bank clients are bearish, with 53% of open positions being short.
Spreads (avg, pip) / Trading volume / Volatility
Traders bullish on US Dollar
Traders expect that the US Dollar may appreciate up to the 113.53 mark against the Yen in three months' time (unchanged from Wednesday). 60% of all forecasts fall above the current spot price which is located near the 113.67 mark. The majority of voters expect the US Dollar to cost somewhere between 114.00 and 115.50 yen in early October, with 26% of survey participants choosing this trading range.