- The share of buy orders remains unchanged at 55%
- 58% of all open positions are long
- Immediate resistance lies around 105.00
- The closest support rests circa 103.85
- Upcoming events: US JOLTS Job Openings, US Presidential Election, Japanese Current Account
US private companies added fewer than expected jobs last month, whereas the unemployment rate improved slightly, the October Non-Farm Payrolls report showed on Friday. According to the Bureau of Labor Statistics, the US economy created 161,000 new jobs in the reported period, while market analysts expected non-farm payrolls to increase by 174,000. Meanwhile, the September gain was revised up to 191,000 from the originally reported 156,000. However, the odds of a December rate remained quite high, despite today's disappointing jobs report. Furthermore, average hourly earnings advanced 2.8% and 0.4% on annual and monthly basis, respectively, while average weekly remained unchanged at 34.4 last month. The unemployment rate declined unexpectedly to 4.9% in October, following the preceding month's 5.0%. After the release, the US Dollar declined slightly against other major currencies, trading at 1.1111 against the Euro and 103.10 against the Japanese Yen.
Separately, the Bureau of Economic Analysis said on Friday that the US trade deficit narrowed to $36.44 billion in the same month from September's gap of $40.46 billion, which was revised up from the originally reported $40.70 billion deficit. Economists expected the US trade gap to decrease to $37.80 billion during October.
US election results in anticipation
Among important events today the US presidential election is to have the most impact. From the Japanese side the Current Account data could have some limited impact. The Current Account is a net flow of current transactions, including goods, services and interest payments into and out of Japan. A Current Account surplus indicates that the flow of capital into Japan exceeds the capital reduction. A Current Account deficit indicates that there is a net capital outflow from these sources.USD/JPY in limbo ahead of US election
Even though the US Dollar inched higher against the Yen on Monday, the immediate resistance area remained untouched. Today technical indicators suggest the Greenback is to outperform the Japanese currency again, which would also imply a breach of the immediate supply area, formed by the weekly R1 and the Bollinger band. On the other hand, the political factor is the main driver today, thus, the impact on the USD/JPY currency pair could be unexpected. Downside risks are also present, with the support cluster around 103.85 unlikely limiting possible losses.Daily chart
On Monday the USD/JPY currency pair easily climbed over the 200-hour SMA, but the picture remains unclear whether the Greenback will be able to sustain the bullish momentum. The lower boundary is the 102.55 level, which could be reached should the elections turn away from the Buck's favour.
Hourly chart
Bullish traders' sentiment keeps fading, as today 58% of all open positions are long, compared to 62% on Monday. Meanwhile, the share of buy orders remains unchanged at 55%.
Meanwhile, there has been a decrease in the number of long positions at other brokers. Right now 56% of OANDA clients are bulls, compared to 58% on Monday. In the meantime, Saxo Bank clients are slightly more bullish than on Monday, being that the portion of longs now takes up 57% of the market.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar
According to the poll that gathered forecasts between October 08 and November 08, traders expect the US Dollar to appreciate to 105.52 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 71% of all forecasts fall above 102 yen, which is close to the current spot price. By far the most popular interval is the 105.00-106.50 one, chosen by 16% of all the surveyed, compared to popularity of the 106.50-108.00, 108.00-109.50 and 109.50-111.00 intervals.