- 62% of all pending orders are to buy the Buck
- 50% of all open positions are long
- The nearest significant resistance is around 111.80
- The 109.22 level provides strong support
- Upcoming events: US Initial Jobless Claims, US HPI, US CB Leading Index
US oil inventories fell for the second consecutive time last week, official data showed on Wednesday. As reported by the Energy Information Administration, the number of barrels of crude oil dropped 2.5M in the week ended June 16, compared to the preceding week's decline of 1.7M barrels, while analysts predicted a much lower drop of 1.2M barrels. US crude oil production climbed to 9.35M barrels per day, 20K higher than in the prior week, the EIA reported. Gasoline stockpiles plunged 578K, whereas analysts anticipated a gain of 444K barrels.
In the meantime, distillate stocks advanced 1.1M barrels, surpassing expectations for a 465K-barrel increase. US refinery runs fell 104K bpd as the utilisation rate dropped 0.4% to 94%. The number of barrels of crude oil held in storage at the Cushing, Oklahoma, plunged 1.08M barrels during the reported week. Oil prices rose shortly after the report was published but failed to sustain those gains. Thus, soon after the release, West Texas Intermediate futures fell to $43.41 per barrel, whereas Brent futures declined to $45.79 per barrel.
US HPI and Jobless Claims
On Thursday there are only two events to focus on – both from the US. First of all, the Initial Jobless Claims, which are a measure of the number of people filing for state unemployment insurance. In other words, it provides a measure of strength in the labor market. A larger than expected number indicates weakness in this market, which influences the strength and direction of the US economy. The other data release is the US HPI. It provides an estimated value of housing market conditions. It is also an important indicator, as the housing market is considered as a sensitive factor to the US economy.
USD/JPY continues to edge lower
The USD/JPY pair's attempts to recover were limited by the descending channel's resistance line. The exchange rate bounced back from this down-trend and is now expected to keep moving lower. The channel's lower boundary is located only near 108.00, meaning that the Greenback has a lot of room to keep declining. Furthermore, the monthly S1 at 109.22 is a strong support, which could prevent the given pair from falling deeper down. Technical indicators, however, are unable to confirm the possibility of the negative outcome today, as they are giving mixed signals in all timeframes. No significant drops are likely to occur by the end of the week, as there are no scheduled fundamental events that could have such a bearish impact on the US Dollar. Price is expected to close near 110.65 today.Hourly chart
On the daily chart the USD/JPY currency pair is seen losing steam, as it once again began to decline after putting the monthly PP at 111.80 to the test. The 20, the 55 and the 200-day SMAs are unlikely to limit the upcoming losses, thus, the exchange rate could reach its lower boundary, namely the monthly S1 at 109.22, by the end of next week.
Daily chart
Traders' sentiment reached a perfect equilibrium today, with 50% of all open positions being long and the other 50% - short. Meanwhile, there are 62% of all pending orders set to buy the Greenback.
At the moment, 58% of OANDA clients are long the US Dollar against the Yen, while the remaining 42% are short. In addition, Saxo Bank clients' sentiment slightly improved over the day, as 57% of their open positions are now long.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between May 22 and June 22, traders expect the US Dollar to appreciate to 113.37 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 above 112.50 yen, which is above the current spot price. The majority of people who voted expect the US Dollar to cost somewhere between 114.00 and 115.50 yen in three months, with 16% of survey participants choosing this trading range. Furthermore, the 108.00-109.50 and the 118.50-120.00 ranges were the second most popular ones, with 14% of the voters choosing each of them.