- The share of sell orders inched up from 52 to 56%
- 59% of traders hold long positions
- Immediate resistance lies at 115.08
- The closest support rests around 114.63
- Upcoming events: US PPI and Core PPI
The US private sector created more jobs than expected last month, providing support for a Fed interest rate hike on Wednesday. The Bureau of Labor Statistics reported on Friday that nonfarm payrolls rose 235,000 in February, while analysts expected nonfarm employment to climb 196,000 in the reported month. Meanwhile, January's gain of 227,000 was revised up to 238,000. The construction sector contributed most to the February gain, adding 58,000 jobs. Over the past six months, the sector created an average of 177,000 jobs per month Data also showed average hourly earnings advanced 0.2%, falling behind analysts' expectations for a 0.3% increase. January's rise of 0.1% was revised up to 0.1%. The jobless rate came in at 4.7% for February, marginally down from the prior month's 4.8% and in line with market forecasts.
Over the past three months, the US private sector added an average of 209,000 jobs per month. The better-than-expected NFP report combined with rising inflation are likely to force the Federal Reserve to raise rates for the first time this year on Wednesday, during its policy meeting. Back in December 2016, the Central bank projected at least three rate hikes in 2017. Analysts suggest that the US labour market is at or close to full employment.
US PPI and Core PPI to focus on
Ahead of Wednesday's FOMC Meeting Minutes traders can focus on the US PPI and Core PPI. The PPI measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Changes in the PPI are widely followed as an indicator of commodity inflation. In the Core PPI, however, volatile products, such as food and energy, are excluded in order to capture a more accurate calculation.USD/JPY retests channel's resistance
The USD/JPY currency pair behaved in accordance with expectations yesterday, being that it managed to remain above the immediate support area and avoid substantial gains. Nevertheless, the pair remains close to its ascending channel's upper border; at this point positive US fundamental could trigger an upside breach, with the resistance around 115.60 expected to prevent the Buck from edging further up. Disappointment in the data, on the other hand, is to force the US Dollar to erase most if not all gains against the Yen today. According to technical studies the bullish momentum is to prevail, while we still believe the channel's resistance is to remain intact.Daily chart
The USD/JPY pair appears to be reluctant to fall under the 200-hour SMA. However, the 115.00 is also a challenge, as the Buck was unable to maintain trade above it for an extended period of time. Thus, flat trade is expected with a rather narrow trading range; a market mover, such as tomorrow's Fed Minutes, is required to break out from this ‘cage'.
Hourly chart
There are 59% of traders holding long positions today (previously 55%). Meanwhile, the share of sell orders inched up from 52 to 56%.
Right now 55% of OANDA clients are bulls, compared to 51% on Monday. In the meantime, Saxo Bank clients retain a positive outlook towards the US Dollar, being that 57% of their open positions are now long and the remaining 43% are short.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between February 14 and March 14, traders expect the US Dollar to appreciate to 115.00 yen in three months' time, while the forecast for March 31 was 117.66 yen. It is also worth noticing that 65% of all forecasts fall above 114 yen, which is above the current spot price. The majority of people voted expect the US Dollar to cost somewhere either between 114.00 and 115.50 or between 118.50 and 120.00 yen in three months, with 17% of the survey participants choosing each of these trading ranges. At the same time, the second most popular interval was the 106.50-108.00 one, with 13% of survey participants choosing it.