- 58% of all pending orders are to sell the Buck
- 70% of traders are short the US Dollar
- Immediate resistance lies around 113.90
- The closest support rests around 112.50
- Upcoming events: US Goods Trade Balance, US Markit Services PMI
New orders for US manufactured durable goods rose markedly last month, driven by higher demand for machinery and other equipment, official figures revealed on Wednesday. Overall, new orders for capital goods jumped 4.8% in October, according to the US Department of Commerce. Meanwhile, market analysts anticipated a slight acceleration to 1.2%. The September figure was revised down from -0.1% to -0.3%. Demand for transportation equipment jumped 12% during the reported month, the largest gain since October 2015. Back in September, new orders for transportation equipment climbed 0.4%. Excluding orders tied to transportation, core durable goods orders increased 1.0%, following September's downwardly revised gain of 0.1% and surpassing the 0.2% rise market forecast. The US economy is set to expand at a 3.6% annual pace in the Q3, after growing 2.9% in the previous quarter.
Separately, the Department of Labor reported on Wednesday the number of Americans filing for unemployment benefits increased to 251,000 in the week ending November 18, up from the prior week's 233,000, whereas analysts expected a milder rise to 241,000.
Markit Services PMI is the only event worth paying attention to today
Friday is a rather quiet day in terms of fundamental data, with only one event expected to have at least some impact on the USD/JPY pair, namely the US Markit Services PMI. The Services PMI captures business conditions in the services sector. As the services sector dominates a large part of total GDP, the services PMI is an important indicator of the overall economic condition in the US.USD/JPY expected to remain within the channel's borders
The USD/JPY currency pair behaved in accordance with expectations on Thursday, having successfully retaken the 113.00 level and leaving the immediate resistance area intact. Despite technical indicators retaining bullish signals, the Buck now is under higher risk of weakening against the Japanese currency, as the pair still faces a rather strong resistance, now formed by the weekly R2 and the 23.60% Fibo. Even if bulls manage to push the Greenback higher, a surge beyond the ascending channel's resistance line at 114.44 is unlikely. The base case scenario is a decline up to 100 pips, as a slump further would imply a downside breach of the channel pattern.Daily chart
The pair kept putting the upper border of the channel to the test yesterday, with bearish momentum prevailing at first today. However, the lower boundary is expected to remain intact and with the exchange rate to keep oscillating around 113.50.
Hourly chart
Today 70% of traders are short the US Dollar, compared to 67% on Thursday. Meanwhile, 58% of all pending orders are to sell the Buck.
Meanwhile, there has been a small decrease in the number of long positions at other brokers. Right now 58% of OANDA clients are bears, compared to 57% on Thursday. In the meantime, Saxo Bank clients are still slightly on the bearish side, being that the portion of shorts takes up 51% 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 25 and November 25, traders expect the US Dollar to appreciate to 108.38 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 51% of all forecasts fall above 108 yen, which is close to the current spot price. The majority of people voted expect the US Dollar to cost somewhere between 111.00 and 112.50 yen in three months, with 22% of the survey participants choosing that trading range. Meanwhile, the second most popular interval is the 105.00-106.50 one, chosen by 15% of all the surveyed, compared to popularity of the 106.50-108.00, 108.00-109.50 and 109.50-111.00 intervals.