- The share of buy orders surged from 47 to 59%
- 68% of traders are long the Greenback
- Immediate resistance lies around 113.50
- The closest support rests around 111.80
- Upcoming events: US Current Account, Japanese Trade Balance, US HPI, US Existing Home Sales, US Crude Oil Inventories
The number of Americans who filed for unemployment insurance last week decreased to 241,000, a survey from the Labor Department revealed on Thursday, following the preceding week's 243,000 filings. Meanwhile, market analysts anticipated a slight rise to 245,000 during the reported period. The number of new residential building permits issued in February fell 6.2%, the Census Bureau revealed on Thursday. Nevertheless, housing construction advanced 3% and was mainly driven by one-family house applications, whose growth hit a record since September 2007. The spike in construction was mainly attributable to the robust job market and healthier finances. Yet, high mortgage costs and increasing real estate prices remain an issue for potential home buyers. Overall, the situation in the home-building industry remains positive, as the housing market index reached a 12-year high. The diffusion index fell to 32.8 in March, the Philadelphia Fed reported on Thursday.
Nonetheless, it remained positive for eight consecutive months. The difference between firms who reported an increase in activity against decrease was 33%. Similarly, the difference between firms reported a rise in employment against unemployment was 17%. So, in general, regional manufacturers maintained optimism.
Not much data to focus on
Today attention could be paid to the US Current Account data. It is a net flow of current transactions, including goods, services and interest payments into and out of the US. A current account surplus includes that the flow of capital into the US exceeds the capital reduction. Normally, a high reading is seen as positive, whereas a low reading is seen as negative. Furthermore, the Japanese Trade Balance data is to be released early tomorrow, as well as the Meeting Minutes; however, they are unlikely to have a significant impact on the Yen. Instead, traders can focus on the US Existing Home Sales and the Housing Price Index. The Existing Home Sales and the HPI provide an estimated value of housing market conditions. As the housing market is considered as a sensitive factor to the US economy, it generates some volatility for the USD.USD/JPY attempts to preserve the channel pattern
Even though the USD/JPY pair remained relatively unchanged yesterday, a small bearish development was still sufficient for the exchange rate to stabilise below the ascending channel's support line. Nevertheless, the Buck still has the opportunity to recover and, thus, preserve the pattern. However, a rally beyond 113.00 is unlikely to occur, as a tough resistance cluster is located beyond that area. Since technical studies are unable to confirm the possibility of the positive outcome, we should not rule out the risk of a seventh consecutive decline taking place, with the nearest area to limit the losses located only around 111.80.Daily chart
The hourly chart is still unable to clarify the picture and help determine what could happen with the USD/JPY currency pair. The bottom floor, however, coincides with the one on the daily chart, as the pair was unable to fully pierce the 111.70 psychological support for four months now.
Hourly chart
There are 68% of traders being long the Greenback today (previously 56%), while the share of buy orders surged from 47 to 59%.
Right now 61% of OANDA clients are bulls, compared to 60% on Monday. In the meantime, Saxo Bank clients retain a positive outlook towards the US Dollar, being that 63% of their open positions are now long and the remaining 37% 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 21 and March 21, traders expect the US Dollar to appreciate to 115.27 yen in three months' time, while the forecast for March 31 was 117.66 yen. It is also worth noticing that 69% 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 between 118.50 and 120.00 yen in three months, with 21% of the survey participants choosing this trading range. At the same time, the second most popular interval was the 115.50-117.00 one, with 14% of survey participants choosing it.