- 52% of pending orders are to sell the US Dollar
- 67% of all open positions are short
- The nearest significant resistance is around 114.80
- Downside potential down to 114.00
- Upcoming Events: US JOLTS Job Openings, FOMC Member Brainard Speaks, Japanese PPI y/y
US private companies showed a stronger-than-expected job growth in June, indicating that the labour market continued strengthening further. The official Labour Department's report showed that the country's private sector added 222K jobs last month, surpassing market expectations for a modest increase of around 175K in June. Meanwhile, May's figure was revised up to 152K from 138K registered previously.
The US non-farm payrolls increase, the second largest within this year, was supported by strong gains in government, healthcare, restaurants as well as business and professional services sectors, the Labour Department revealed. Notwithstanding job growth acceleration, the unemployment rate was slightly higher, at 4.4%, suggesting that more people were left without job. In addition, the report showed that average hourly earnings rose modestly, jumping 0.2% over the month of June, with 2.5% yearly increase in wages. Analysts believed that weak productivity was curbing wages, while some of them were optimistic over the tightening labour, expecting it to spur wage growth at a faster pace.
Minor Data Releases
Similarly to Monday, there are no significant data releases in this session. Firstly, the US is to publish monthly data on JOLTS Job Openings at 1400 GMT. Secondly, the Federal Reserve Governor Lael Brainard is to discuss the topic of normalizing central banks' balance sheets at 1630 GMT. Finally, Japan is to release monthly PPI at 2350 GMT.
USD/JPY edges higher on Tuesday
The US Dollar was trading in a small range against the Yen on Monday. The pair entered a consolidation period, thus demonstrating the almost equal force of bulls and bears. The American currency edged higher in the morning session and surpassed the two-month high at 114.34. Technical indicators suggest that the upside momentum has not yet allayed, signalling to further increase in price. The nearest level of resistance is the upper channel boundary circa 114.80. However, the pair is more likely to trade sideways due to lack of major fundamental events, thus being located in the 114.70/80 area on Wednesday morning. In case of stronger downside risks, the 55-hour SMA should support the Greenback from falling lower.Hourly chart
In line with expectations, USD/JPY managed to surpass the monthly R1 at 113.94 on Monday. Thus, it is likely that the US Dollar continues to appreciate against the Yen, approaching the 114.50/115.00 area. The closest resistance is set by the monthly R2 at 115.48.
Daily chart
67 short 52 sell The bearish market sentiment has increased in this session, as 67% of all open positions are short, compared to 63% on Monday. In addition, 52% of pending orders are to sell the US Dollar.
OANDA clients are slightly bullish on the US Dollar, as the number of traders holding long positions is at 51%. Meanwhile, Saxo Bank remain bearish, with 54% of open positions being short.
Spreads (avg, pip) / Trading volume / Volatility
Traders bullish on US Dollar
Traders expect the Greenback to appreciate up to the 113.68 mark against the Japanese Yen in three months' time (113.84 on Monday). Currently, 62% of all forecasts are strongly bullish, being located above the current spot price. Nevertheless, the majority of voters still expect the US Dollar to cost somewhere between 114.00 and 115.50 yen mid-October, with 29% of survey participants choosing this trading range (+3%).