- The share of buy orders inched up from 57 to 61%
- 70% of all open positions are long
- Immediate resistance lies at 110.28
- The closest support rests around 109.25
- Upcoming events: US President Trump's Speech, US Import Prices, US Federal Budget Balance, US PPI and Core PPI, US Initial Jobless Claims
US employers posted more open job positions in the second month of the year, official figures revealed on Tuesday. According to the Job Openings and Labor Turnover survey published by the Labour Department, job openings advanced 2.1% to a seasonally adjusted 5.7M during the reported period, following the preceding month's 5.6M and surpassing market analysts' expectations for a decrease to 5.59M. That marked the highest level since July 2016. February's gain boosted the jobs opening rate to 3.8% after it remained steady at 3.7% for four consecutive months.
Nevertheless, hiring fell to 5.3M in February, compared to 5.4M registered in the preceding month. Therefore, the hiring rate dropped to 3.6% from 3.7% in January. Analysts stated that the US labour market is at or close to full employment, with the unemployment rate at a near 10-year low of 4.5%. Monthly job openings are closely followed by the Federal Reserve Chair Janet Yellen, as it is considered as a key barometer of economic conditions and the labour market trends. On Monday, the Fed Chair hinted at two more rate hikes this year, and some analysts suggested that the Fed might want to pull the trigger in June. After the release, the USD/JPY pair dropped to 100.58, its lowest level since November 18.
US Import Price Index and the Federal Budget Balance
Among events worth paying attention to today are the US Import Price Index and the US Monthly Budget Statement. The US Import Price Index informs the changes in the price of imported products into the US. The higher the cost of imported goods, the stronger the effect they will have on inflation, redunding in a higher probability of a rate rise. As for the Monthly Budget Statement, it summarizes the financial activities of federal entities, disbursing officers, and Federal Reserve banks. A positive budget statement that receipts exceed budgetary outlays is seen as bullish for the USD. The US President Donald Trump is also scheduled to speak today, whose words could have a great impact on the US Dollar.USD/JPY to approach 109.00
The US Dollar suffered a great deal on Tuesday, amid rising tensions over both Syria and North Korea. As a result, the Buck lost more than 130 pips against the Japanese Yen, crossing the 110.50 psychological support, now being one step away from retesting the descending channel's lower border at 109.09. The support line is unlikely to be pierced, as it is bolstered by a number of other levels of significance. From a broad technical perspective the USD/JPY pair should post a recovery today, despite technical indicators suggesting otherwise. We, however, still expect the channel's support line to be put to the test before a rebound occurs.Daily chart
The US Dollar surprised yesterday, as it easily pierced the three-week up-trend, where the exchange rate was expected to rebound. The USD/JPY pair appears to have bottomed out at 109.40, but given that there are no solid supports around this area, a drop lower, namely towards the 109.00 mark, is still possible.
Hourly chart
Once again 70% of all open positions are long (previously 65%). Meanwhile, the share of buy orders inched up from 57 to 61%.
Right now 63% of OANDA clients are bulls, slightly higher than on Tuesday, the bullish sentiment has been holding around the same level for some time now. In the meantime, Saxo Bank clients retain a positive outlook towards the US Dollar, being that 65% of their open positions are now long and the remaining 35% are short.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between March 12 and April 12, traders expect the US Dollar to appreciate to 113.19 yen in three months' time, while the forecast for March 31 was 117.66 yen. It is also worth noticing that 60% of all forecasts fall under 114 yen, which is above the current spot price. The majority of people voted expect the US Dollar to cost somewhere between 108.00 and 109.50 yen in three months, with 20% 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.