US companies created less new positions than expected last month, whereas the jobless rate dropped unexpectedly. The US Department of Labour reported on Friday that the US private sector added 138K new jobs to the economy in May, following the preceding month's downwardly revised reading of 174K and falling behind expectations for a 181K gain, while the ADP Report showed Thursday that private payrolls rose 253K in May.
Meanwhile, the unemployment rate dropped unexpectedly to 4.3% during the same month, while analysts expected the rate to remain unchanged at 4.4% last month. The jobless rate fall was mainly driven by the nation's drop in the labour force participation rate to 62.7%, the lowest since May 2001. Apart from that, average hourly earnings climbed 0.2% in May, in line with analysts' forecasts. In the meantime, April's increase of 0.3% was revised down to a 0.2% gain. Despite Friday's weak figures, the odds for a rate hike in June remained high at 93.5%. However, some analysts suggested that if inflation growth remains unstable it would be hard for the Federal Reserve to continue raising rates.
US Services PMI is the most important event today
USD/JPY struggles to rebound
The Buck's attempts to appreciate against the Yen at the end of the previous week were in vain, as downbeat US NFP data caused the given pair to erase all of that week's gains. Nevertheless, the Greenback appears to be reluctant to fall under the 110.50 mark, as it remained above this handle ever since it was retaken back in April. Technical indicators, on the other hand, suggest the USD/JPY is to continue slumping, but that might not be the case due to the breach of the three-week down-trend. Furthermore, the US Dollar is also supported by another trend-line circa 110.30, which should limit the possible losses and provide sufficient impetus for a future recovery.Hourly chart
Traders' sentiment remains bearish, with 53% of all open positions now being short. Meanwhile, there are nearly three quarters (72%) of all pending orders set to sell the Greenback.
At the moment, 61% of OANDA clients are long the US Dollar against the Yen, while the remaining 39% are short. In addition, Saxo Bank clients' sentiment slightly improved over the weekend, as 62% of their open positions are now long.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar