- 63% of traders are long the US Dollar
- The share of buy orders inched up from 54 to 60%
- The weekly S3 and the June low form support around 100.20
- The closest resistance rests around 100.60
- Upcoming events: US Initial Jobless Claims, US Existing Home Sales, US HPI
Crude oil inventories in the United States fell sharply last week, official data showed on Wednesday. According to the Energy Information Administration's weekly report, US crude stocks dropped 6.2 million barrels to a total of 504.6 million in the week ended September 16, compared to the preceding week's decline of 0.6 million barrels, while market analysts anticipated a rise of 3.2 million barrels in the reported week. The data also showed gasoline inventories decreased 3.2 million barrels, exceeding analysts' expectations for a 567,000 barrel fall, whereas distillate stocks added 2.2 million barrels, compared to the 250,000 increase forecast. On Tuesday, the American Petroleum Institute reported a 7.5 million drop in US crude oil inventories for the same week, surpassing the 3.4 million barrel fall market forecast.
After the release, West Texas Intermediate (WTI) crude futures jumped $1.11, or 2.5%, trading at $45.16 per barrel, whereas Brent crude futures advanced $0.95, or 2.1%, trading at $46.83 per barrel on the New York Stock Exchange on Wednesday. However, analysts consider next week's meeting between OPEC and Russia to be the major driver for the market.
US Initial Jobless Claims and Existing Home Sales
Thursday is not very rich in terms of fundamental economic data, but some events could still have an impact on the USD/JPY pair's performance today. One of these events is the US Initial Jobless Claims, which are released by the US Department of Labor, and are a measure of the number of people filing first-time claims 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. Generally speaking, a decreasing number should be taken as positive or bullish for the USD. Another event is the Existing Home Sales, which provide an estimated value of housing market conditions. As the housing market is considered to be a sensitive factor to the US economy, it generates some volatility for the USD.USD/JPY sets eye on 100.00
The Fed put only more pressure on the Greenback yesterday, causing it to weaken against the Japanese Yen. Ultimately, the pair suffered a 138-pip loss, after having reconfirmed the one-year down-trend. However, according to technical studies, more bearish momentum is likely to follow. This is not surprising, as the USD/JPY pair breached a tough support cluster around 100.60. On the other hand, the Buck now faces the 100.00 psychological level, which could still limit the losses, as a strong impetus is required for the Yen to keep outperforming the Buck. In case the 100.00 mark gives in the next targets will be the weekly S3 at 99.44 and the June low of 99.03.Daily chart
On Wednesday the one-month up-trend has been breached, caused by a U-turn from the one-year resistance line. Before reaching the 100.00 mark, which is a strong psychological support, the Buck could still rebound significantly, although the 50% Fibo could prevent that from happening.
Hourly chart
Today 63% of traders are long the US Dollar (previously 61%). At the same time, the share of buy orders inched up from 54 to 60%.
There has been an increase in the number of long positions at other brokers as well. Right now 73% of OANDA clients are bulls, up from 66% recorded on Wednesday. Saxo Bank clients, however, are more bullish than on Wednesday, being that the portion of longs increased from 62 to 69%.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar
According to the poll that gathered forecasts between August 22 and September 22, traders expect the US Dollar to appreciate to 105.47 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 82% of all forecasts fall above 102 yen, which is the current spot price. By far the most popular interval is 109.50-111.00, chosen by 20% of all the surveyed, compared to popularity of the 102.00-103.50, 103.50-105.00, 105.00-106.50 and 106.50-108.00 intervals.