- 59% of pending orders are to buy the US Dollar
- 57% of all open positions are short
- The nearest resistance is at 111.78
- Immediate support rests at 111.48
- Upcoming events: FOMC Member Harker's Speech; FOMC Member Kashkari's Speech; FOMC Member Brainard's Speech; FOMC Member Evans's Speech
The number of Americans filing for unemployment benefits dropped unexpectedly last month, official figures revealed on Thursday. The US Department of Labour reported that initial jobless claims fell to 232K in the week ending May 12, following the preceding week's 236K and posting the third consecutive decline. In the meantime, analysts held expectations for an increase to 240K. Claims remained below the 300K level for 115 straight weeks, the longest stretch since 1973.
The number of continuous claims fell 22K to 1.90M during the week ended May 5, the lowest since November 1988. Back in April, US private companies created 211K jobs, roughly meeting analysts' expectations. Other data released on Thursday showed that manufacturing activity in Philadelphia jumped to 38.8 points in May, up from the preceding month's 22.0, whereas analysts anticipated a slight decrease to 19.9. More than half of market participants expect the Federal Reserve to raise rates next month. However, uncertainties tied to the US President Donald Trump and Russia may lower significantly the chances of a June rate hike.
Central bankers speak
There are no significant data sets about to be released that could influence the financial markets. However, the calendar is full of other events. There are four FOMC member speeches scheduled to occur during Monday's session. First of all at 14:00 GMT Harker will give a speech. Afterwards, at 14:30 GMT, Kashkari will speak publicly. At 23:00 GMT Brainard is set to speak, and, last but not least, Evans will give a speech at 01:10 GMT.
USD/JPY tests 55-day SMA at 111.72
This trading week has started with the US Dollar appreciating slightly against the Yen. The closest upper limit is set by the 55-day SMA at 111.72. The given resistance was strong enough not to pass the pair through in the previous two sessions; thus, a breakout might be regarded as a bullish sign, leading the Greenback towards the 20-day SMA at 112.37. Today, it might be expected that the pair remains confined within the bounds of the 55-day SMA and the monthly PP. However, it is yet to be seen if the close occurs in the red or green area.Daily chart
The pair is trading within the bounds of the 100 and 55-hour SMAs. It is expected that the given levels should diminish their distance, thus resulting in a breakout of either direction. Taking into account the complexity of the given situation, a better understanding of the possible breakout direction should be searched in other time-frames.
Hourly chart
Traders have not changed their bearish outlook in this trading session, as 57% of open positions are short. However, 59% of set up orders are to buy the US Dollar.
At the moment, 54% of OANDA clients have remained bullish on the pair. In addition, Saxo Bank clients have not changed their sentiment, as 60% of open positions are bullish.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between April 22 and May 22, traders expect the US Dollar to appreciate to 111.72 yen in three months' time, while the forecast for March 31 was 117.66 yen. It is also worth noticing that 56% of all forecasts fall above 111 yen, which is still below the current spot price. The majority of people who voted expect the US Dollar to cost somewhere between 112.50 and 114.00 yen in three months, with 16% of survey participants choosing this trading range.