- The share of buy orders declined from 52 to 38%
- Bullish market sentiment returned to its Wednesday's level of 64%
- Support rests at 99.78
- The weekly S1 at 100.55 represents immediate resistance
- 55% of the survey participants expect the US Dollar to cost less than 105.00 yen in three months
- Upcoming events: Philadelphia Fed manufacturing Index, US Initial Jobless Claims, FOMC Member Dudley Speech
Initial jobless claims posted a surprise fall, fresh data revealed on Thursday. According to the Department of Labor, the number of Americans filing for unemployment benefits dropped to 262,000 in the week ended August 13, following the preceding week's reading of 266,000, whereas market analysts pencilled in a slight increase to 269,000 in the reported period. Four weeks ago, claims hit the 43-year low of 248,000 touched in mid-April. Last week's data marked the 76th consecutive week of initial jobless claims below the 300,000 level, the longest streak since 1973. Meanwhile, the four-week moving average, considered a better measure of labour market trends, jumped 2,500 to 265,250 in the week ending August 13. Other data released on Thursday showed an unexpectedly large improvement of business activity in the US mid-Atlantic region. According to the Philadelphia Federal Reserve's survey, the manufacturing activity index rose to 2.0 points in August, after dropping 2.9 in the preceding month, while economic desks anticipated an increase to 1.2 in the reported month.
Furthermore, the survey's six-month outlook indicator grew to 45.8 in August from last month's 33.7, posting the highest reading since January 2015. The survey tracks business activity in eastern Pennsylvania, southern New Jersey, and Delaware. The Philly Fed index is seen as one of the first monthly indicators of the health of the US economy.
Quiet end of the week
There are no important economic data releases today that could influence the USD/JPY currency pair's performance. Monday is also quiet in terms of fundamental events, while on Tuesday there is only one relevant event due, namely the US New Home Sales. The number of New Home Sales, released by the US Census Bureau, is an important measure of housing market conditions. House buyers spend money on furnishing and financing their homes, so, as a result, the demand for goods, services and employees is stimulated. Generally, a high reading is seen as bullish for the USD, whereas a low reading is seen as bearish.USD/JPY attempts to regain the bullish momentum
The Japanese Yen continued to outperform the American Dollar, causing the pair to drop below the 100.00 major level, but with the immediate support remaining intact. Earlier today the Buck managed to begin appreciating against the Yen, despite poor risk environment, but succeeding in climbing back above the 100.00 mark, for the time being at least. The nearest resistance rests at 100.55, which could keep the USD/JPY pair at bay and even trigger another sell-off, which is still suggested by the technical indicators. In case bears manage to take over the market, the immediate support at 99.78, namely the weekly S2, risks getting breached, with the target shifting to 99.00.Daily chart
The USD/JPY currency pair put the possible resistance trend-line to the test yesterday, thus, confirming it. However, the exchange rate breached the given down-trend earlier today, which is quite expected, as falling wedges usually end with upside breakouts. However, the bearish trend could last for one more day, leading to a close below 100.00 and the preservation of the pattern.
Hourly chart
Bullish market sentiment returned to its Wednesday's level of 64%, while the share of buy orders declined from 52 to 38%.
Sentiment at Saxo Bank is virtually the same - 69% of the Denmark-based clients are currently holding long positions. Traders at OANDA are even more confident in Dollar's appreciation - as many as 71% of open positions are long. Using the data as a contrarian indicator, the sentiment implies a cheaper Dollar. There is little room for new buyers to enter the market, and if the bulls start closing positions on profit-taking, this could create a strong selling pressure.
Spreads (avg, pip) / Trading volume / Volatility
Slightly more than a half expect the exchange rate to fall below 105.00 yen
Slightly more than half of the surveyed (55%) now assume that the US Dollar is to cost less than 105.00 yen after a three month time. The most popular choice, however, implies that the Greenback is to cost more than 109.50 yen in three months, selected by 18% of the voters. According to the votes collected between July 19 and August 19, the mean forecast for November 19 is 103.79. At the same time, 16% of the surveyed believe the Greenback could cost somewhere between 99.00 and 100.50 yen in three months.