The mood of American shoppers deteriorated for the second consecutive month in May. The Conference Board reported on Tuesday that its Consumer Confidence Index dropped to 117.9 points in the reported month, falling behind expectations for 120.1 points. Apart from that, April's reading was revised down to 119.4 from initially reported 120.3 points. The share of consumers saying business conditions were "good" fell to 29.4% from 30.8% in April, whereas the share of those saying business conditions were "bad" remained unchanged at 13.7% in May. The share of shoppers expecting business conditions to improve over the next six months fell to 21.3% from 25.1% in April, whereas the share of those expecting more jobs to be created over the same period of time declined to 18.6% in May from 21.9% in the preceding month.
Meanwhile, 29.9% of the respondents stated that there were plentiful jobs, compared to 30.3% in April. Earlier in the day, the Commerce Department reported that consumer spending climbed 0.4% last month, the largest gain since December. Overall, US consumers maintained the positive outlook for the economy.
Most attention turns to US fundamentals
USD/JPY gravitates towards 111.00
As was anticipated, the resistance area circa 111.40 caused the US Dollar to weaken against the Japanese Yen on Tuesday, with the weekly S1 at 110.76 limiting the losses. The pair remains contained within a specific trading range, namely between 110.50 and 111.40, leaving little room for another leg down. However, technical indicators suggest that bears are likely to prevail today, although from a broad technical perspective the Buck should strengthen. In either case neither the immediate support nor the resistance are expected to be pierced, leaving the USD/JPY pair to ‘consolidate' for another day ahead of the US NFP data.Daily chart
There are 57% of traders holding long positions today (previously 58%), whereas 55% of all pending orders are to buy the Greenback.
At the moment, 55% of OANDA clients are long the US Dollar against the Yen, while the remaining 45% are short. In addition, Saxo Bank clients' sentiment once again improved, as 61% of their open positions are now long.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar