- 57% of all pending orders are to buy the Buck
- 53% of all open positions are long
- The nearest significant resistance is around 111.80
- Downside potential down to 110.83
- Upcoming events: US Flash Services PMI, US New Home Sales, FOMC Member Powell Speaks
The number of Americans filing for unemployment benefits rose slightly last week, official figures revealed on Thursday. The US Department of Labour reported that initial jobless claims rose to 241K in the week ended June 16, following the preceding week's upwardly revised 238K but meeting market analysts' expectations. Initial claims remained below the 300K level for the 120th week, the longest streak since 1973. The four-week moving average of initial jobless claims climbed 1.5K to 244,750 last week, the highest level since April.
Apart from that, Thursday's data also showed that the number of people continuing to receive jobless benefits rose 8K to 1.94M in the week ended June 10. Continuous claims remained below the 2M level for 10 consecutive weeks, pointing to the strong labour market trends. According to some analysts, the US labour market is at or close to full employment, with the unemployment rate at a 16-year low of 4.3%. If the jobs market continues to perform strong, the Fed will likely speed up interest rate hikes. However, to make the next rate hike policymakers will also focus their attention on inflation growth.
No strong market shakers scheduled for today
Friday's economic calendar is rather empty for both currencies. However, there are still four data sets planned in this trading session – all from the US. The country is to publish Flash Manufacturing PMI and Flash Services PMI at 1345 GMT and 15 minutes later – New Home Sales. Today's calendar will be finalised with FOMC Member Powell's speech at 18:15 GMT.
USD/JPY tests channel boundary once more
Despite being pressured to the downside early Thursday, USD/JPY made a U-turn and moved closer the upper channel boundary. The given level, however, was not reached, allowing some room for further appreciation up to 111.42. Yesterday's trading session resulted in a death cross of the 55– and 100-hour SMAs, thus flashing bearish signals. Other technical indicators likewise support a possible fall down to the 111.05/10 territory. As no significant fundamental events are scheduled for today, the pair may continue its movement sideways, setting the aforementioned 111.42 and 111.05 as a possible trading range. In case of strong upward risks, the US Dollar should cap at the 111.80 mark where the monthly PP is located.Hourly chart
As apparent on the daily chart, USD/JPY is stranded between the monthly PP and the 100-hour SMA at 111.80 and three levels, namely, the 20-, 55- and 200-hour SMAs, working as a combined support in the 111.07/110.66 area. It is more likely that the US Dollar may test the latter in this trading session.
Daily chart
Traders remain bullish on the pair, as 53% of all open positions are long in this trading session. Meanwhile 62% of pending orders are to buy the Greenback.
OANDA clients are even more bullish, with 60% of open positions being long, compared to 42% Dollar bears who expect the Greenback to fall against the Yen in this trading session. In addition, trader sentiment at Saxo Bank increased slightly, as 57% of all positions are long.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to a poll forecasting the possible currency price, traders expect the US Dollar to appreciate up to the 113.29 mark against the Yen in three months' time. It is also worth noticing that 56% 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 17% 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 votes.