- The number of buy orders inched up from 47 to 59%
- 61% of traders are long the Buck
- Immediate resistance lies around 113.60
- The closest support rests at 113.19
- Upcoming events: US Import Price Index, US Federal Budget Balance, US Reuters/Michigan Consumer Sentiment
The number of Americans filing for first-time unemployment benefits declined to an almost 43-year low, official figure revealed on Thursday. Last week's drop in claims was driven by tightening labor market, which is likely to prompt wage growth. According to the US Department of Labor, national jobless claims declined 12,000, to 234,000, during the week ending February 4 from the preceding week's upwardly revised 246,000. Meanwhile, economists anticipated a slighter deceleration to 250,000 during the reported period. Filings have been below 300,000 for 101 straight weeks — the longest streak since 1973. In the meantime, the less volatile four-week moving average of initial claims dropped 3,750 to 244,250, the lowest level since November.
Furthermore, continuing claims increased 15,000 to 2.08 million during the week ended January 28, while their four-week moving average fell 3,750 to 2.08 million. These claims, reported with a one-week delay, reflect the number of people already collecting unemployment benefits. Other data released by the Commerce Department on Tuesday showed US wholesale inventories climbed 1% in December, following a similar gain in November. Excluding automobiles, wholesale stocks grew 0.9% in December. The change in private inventories contributed 1% to GDP growth in the final quarter of 2016.
US Import Price Index is the only event of significance today
Today's attention should be paid to the US Import Price Index. It shows the changes in the price of imported products into the US. The higher the cost of imported goods, the stronger the effect they will have on inflation, redunding in a higher probability of a rate rise. It is the only data release that could have some impact on USD-pairs today.USD/JPY attempts to break the down-trend
The US President Trump's promise to reveal a tax plan in the upcoming weeks caused the Greenback to soar, reaching a one-week high against the Japanese Yen. Yesterday's rally allowed the Buck to approach the six-week down-trend, which is expected to be put to the test today. The 20-day SMA is bolstering the trend-line, suggesting a breach is doubtful, unless another political event sparks USD-buying. In that case, the USD/JPY pair's main target will become the cluster around 114.40, formed by the monthly PP and the weekly R1. Meanwhile, technical indicators are unable to confirm the possibility of another positive outcome, as they keep giving bearish signals.Daily chart
With the breach of the 200-hour SMA, the USD/JPY currency pair was able to reach the bearish trend-line today. Due to it being bolstered by the 23.60% Fibo, a full-blown breach could be difficult to achieve, which might result in another bearish development eventually.
Hourly chart
Today 61% of traders are long the Buck, compared to 63% on Thursday. The number of buy orders inched up from 47 to 59%.
Right now 51% of OANDA clients are bulls, compared to 54% on Thursday. In the meantime, Saxo Bank clients remain on the bullish side, being that 51% of their open positions are now long and the remaining 49% are short.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between January 10 and February 10, traders expect the US Dollar to appreciate to 114.46 yen in three months' time, while the forecast for March 31 was 117.66 yen. It is also worth noticing that 66% of all forecasts fall below 117 yen, which is above the current spot price. The majority of people voted expect the US Dollar to cost somewhere either between 111.00 and 112.50 yen in three months, with 16% of the survey participants choosing this trading range. At the same time, the second most popular intervals were the 115.50-117.00 and the 120.00-121.50 ones, with 14% of survey participants choosing each of them.