- Share of bulls increased up to 70% from 69%
- No visible gap between the buy (52%) and sell (48%) commands
- USD/JPY is prone to a decline to 101.50
- 200-hour SMA is resistace at 102.25
- Number of bulls is increasing
- Upcoming events: US (Core) CPI, Consumer Sentiment
According to the Labor Department, the number of Americans filing for unemployment aid rose to a seasonally adjusted 260,000 in the week ended September 10, slightly up from the preceding week's 259,000 claims, while market analysts anticipated an increase to 262,000 during the reported week. It was the 80th consecutive week initial jobless claims remained below the 300,000 level, the longest streak since 1973. The four-moving average of claims, considered a better measure of labor market trends, fell 500 to 260,750 during the same week. Separate data released by the Labor Department revealed that the PPI came in at 0.0% in August, up from July's decline of 0.4%. However, markets expected the Index to increase 0.3%. The so-called core PPI advanced 0.1% last month, also up from July's 0.3% fall and in line with economists' projections.
Other Thursday's data showed that US retail sales declined 0.3% month-over-month in August, compared to July upwardly revised 0.1% rise, whereas economic desks penciled in a slight drop of 0.1% in the reported month. Excluding automobiles, gasoline, building materials and food services, retail sales slipped 0.1% last month, following the previous month downwardly revised fall of 0.4% and falling behind the 0.3% growth forecast.
US prices to grow 0.1%
Starting from Thursday's afternoon, all attention is on the US numbers. Yesterday the readings were mostly negative for the Dollar; however, both inflation and consumer sentiment figures are expected to improve from what we saw a month ago. Price level in the United States is expected to increase 0.1% in August following no change in July. Meanwhile, consumer sentiment, as reported by the University of Michigan, is to come in at 91.0, up from 89.8.Japanese banks will be closed on Monday in observance of Respect-for-the-Aged Day.
USD/JPY gravitates to monthly PP
USD/JPY keeps trading around the monthly pivot point, staying below the 55-day SMA at 102.60 and at the same time above the weekly S1 at 101.20. However, soon the pair will have to violate one of the key levels—resistance at 103.00 or support at 100.80/00, which will determine its future behaviour. This is highly likely to happen already next week, as both the BOJ and the FOMC are to release monetary policy statements during next Wednesday, which promises a lot of volatility on September 21.Daily chart
In the hourly chart USD/JPY appears prone to a decline to 101.50, where the currency pair will meet mid-September lows and also the support trendline that connects troughs starting from mid-August. From the upside movements of the price are restricted by the 200-hour SMA at 102.25.
Hourly chart
Despite the US Dollar being already overbought, the share of bulls increased even more—up to 70% from 69% seen yesterday and from 68% seen five days ago. As for the orders, however, there is no visible gap between the buy (52%) and sell (48%) commands.
There has been an increase in the number of long positions at other brokers as well. Right now two thirds of OANDA clients are bulls, up from 60% recorded yesterday. Saxo Bank clients are also more bullish than yesterday, being that the portion of longs rose from 65 to 68%.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar
According to the poll that gathered forecasts between August 16 and September 16, traders expect the US Dollar to appreciate to 105.16 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 76% of all forecasts fall above 102 yen, which is the current spot price. By far the most popular interval is 109.50-108.00, chosen by a fifth of all the surveyed - by twice as many compared to popularity of the 111.00-109.50, 108.00-106.50, 105.00-103.50 and 103.50-102.00 intervals.