- Buy orders take up 65% of the market
- Bullish traders' sentiment returned to its Wednesday's level of 72%
- Immediate resistance lies around 109.60
- The closest support rests at 109.00
- Upcoming events: US Markit Manufacturing PMI, US Markit Services PMI, US Existing Home Sales
US manufacturing activity in the Mid-Atlantic region slowed markedly in April, official figures revealed on Thursday. The Philadelphia Federal Reserve reported its Manufacturing Index dropped to 22.0 in the reported month, following March's reading of 32.8 and falling behind analysts' expectations for a decrease to 25.6 points. Analysts stated that business optimism prompted by Donald Trump's win in the presidential election started to fade, putting downward pressure on business activity. Thursday's data also showed the New Orders Index fell to 27.4 from 38.6 points posted in March, the highest since December 1987.
Meanwhile, the six-month business outlook declined to 45.4 from 59.5 points registered in March, the strongest since August 2014. The Price Index dropped to 33.7 from 40.7 points posted in March, the highest since May 2011. On the positive side, the Employment Index rose to 19.9, the strongest since May 2011. Manufacturers also said that they would increase capital spending this year due to expected higher sales. Furthermore, 36.7 of the respondents said that capital spending would take place in the first half of the year. Other data release on Thursday showed initial jobless claims climbed 10,000 to 244,000 last week.
US Existing Home Sales, Manufacturing and Services PMIs
Among important economic data releases today are the US Manufacturing and Services PMIs. The US Markit Manufacturing PMI captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the Manufacturing PMI is an important indicator of business conditions and the overall economic condition in the US. As for the Services PMI, it captures business condition in the services sector. It also dominates a large part of total GDP and, thus, is an important indicator of the overall economic condition in the US. Finally, some attention could be turned to the US Existing Home Sales, as they provide an estimated value of housing market conditions. The housing market is considered to be a sensitive factor to the US economy, therefore, it generates some volatility for the USD.USD/JPY sets eye on 110.00
The Buck strengthened on Thursday, adding just under 50 pips against the Yen, thus, prolonging the descending channel pattern. The immediate resistance was also pierced, which now turned into supports, bolstering the channel's lower border. According to daily technical indicators, the USD/JPY pair risks experiencing another leg down and could retest the channel's support line. On the other hand, sufficient demand around the 109.00 mark could help the Greenback recover further, but with the 110.00 expected to be the intraday ceiling.Daily chart
The USD/JPY currency pair broke out from the triangle pattern to the upside on Thursday, completely ignoring the 200-hour SMA resistance. The triangle's lower boundary is now likely to keep acting as a strong support, which might help the Greenback reach the channel's resistance line around 112.00.
Hourly chart
Bullish traders' sentiment returned to its Wednesday's level of 72%, compared to 74% on Thursday. The portion of orders to acquire the Buck added 8%points. The orders now take up 65% of the market.
Right now 63% of OANDA clients are bulls, unchanged since Thursday, the bullish sentiment has been holding around the same level for some time now. In the meantime, Saxo Bank clients retain a positive outlook towards the US Dollar, with their sentiment being close to ours, being that 67% of their open positions are now long and the remaining 33% are short.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between March 21 and April 21, traders expect the US Dollar to appreciate to 111.23 yen in three months' time, while the forecast for March 31 was 117.66 yen. It is also worth noticing that 55% of all forecasts fall above 111 yen, which is above the current spot price. The majority of people voted expect the US Dollar to cost somewhere either between 108.00 and 109.50 or between 112.50 and 114.00 yen in three months, with 15% of the survey participants choosing each of these trading ranges. At the same time, the second most popular interval was the 115.50-117.00 one, with 13% of survey participants choosing it.