- 52% of orders are placed to buy and 48% are placed to sell the Dollar
- 68% of traders are bulls just like yesterday
- USD/JPY forms short-term channel
- Ceiling is at 103.50
- Two thirds of traders forecast stronger Dollar
- Upcoming events: US Import Prices, Crude Oil Inventories
The number of Americans filing for unemployment benefits dropped unexpectedly last week, official data revealed on Thursday. According to the Labor Department, initial jobless claims fell 4,000 to a seasonally adjusted 259,000 in the week ended September 3, touching the lowest level since mid-July and following the preceding week's reading of 263,000. Market analysts anticipated a slight increase to 264,000 filings in the reported period. Last week's numbers market the 79th consecutive week of initial jobless claims remaining below the 300,000 level, the longest streak since 1973. There were no special factors influencing last week's claims data; however, jobless claims for Virginia, New Mexico, Alabama, Minnesota, Hawaii and Puerto Rico were estimated amid the Labor Day celebrated on Monday.
Furthermore, the four-week moving average of initial jobless claims, considered a better measure of labor market trends, declined 1,750 to 261,250 during the same week. Meanwhile, the number of continuing jobless claims dropped 7,000 to 2.14 million in the week ending August 27, whereas the four-week moving average of continuing claims decreased 4,000 to 2.15 million. The claims data together with the latest JOLTS report suggest that the trend in employment growth remains strong.
Downward pressure on inflation from imports
In the afternoon Bureau of Labor Statistics is to reveal whether import prices did in fact fall 0.1% after growing the same percentage in July. Meanwhile judging by the average forecast for crude oil inventories as reported by Energy Information Administration, stock of barrels is to grow by 2.8M, although it decreased by as many as 14.5M during the previous weekly release.USD/JPY probes down-trend
Despite a lack of events in the economic calendar the US Dollar managed to strengthen, and now there is a good chance of the pair settling above 102.70, where the weekly PP coincides with the 55-day SMA. If this is the case, the next resistance to try and stop the advancement will be 103.50, represented by the trendline that originated at the very beginning of the year. Additional resistance is at 104.80 (100-day SMA and monthly R1), but a breach of 103.50 is likely to be followed by a recovery to July highs at 107 yen.Daily chart
In the hourly chart USD/JPY is presently forming a rather narrow ascending channel with resistance at 103.30 and with support around 102.90. Nevertheless, we do not see it developing further, as the currency pair is approaching a major falling trendline. The focus is thus on supports, and one of the closest is the 200-hour SMA at 102.55.
Hourly chart
Regardless of the latest rally in the value of the Greenback positioning in the SWFX market stays exactly the same. At the moment, 68% of traders are bulls just like yesterday. As for the orders, 52% are placed to buy and 48% are placed to sell the Dollar.
There are somewhat less bulls at other brokers, but the idea remains the same - bulls are currently dominating the markets. Speaking of OANDA, 66% of positions open with the Canada-based broker are long, and there are slightly less bulls at Saxo Bank, namely 63% of all the clients trading USD/JPY.
Spreads (avg, pip) / Trading volume / Volatility
Two thirds of traders forecast stronger Dollar
Traders are generally bullish on USD/JPY. Considering that the currency pair is currently trading circa 102 yen, two thirds of them expect the US Dollar to become more expensive in three months, and the rest expect the Greenback to become cheaper. The average forecast for December 8 is 103.88, while the most likely price interval is considered to be 108.00-109.50, which was chosen by 17% of the surveyed.