- Pending orders are equally divided between the buy and the sell ones
- 58% of traders hold long positions
- The nearest resistance is located around 103.74
- The closest support rests at 103.52
- Upcoming events: US Federal Budget Balance, US Labor Market Conditions Index, Japanese Core Machinery Orders
US employment growth slowed unexpectedly last month, official data revealed on Friday. According to the US Department of Labor, US private companies created 156,000 new jobs in September, while market analysts expected the economy to add 171,000 jobs in the reported month. Meanwhile, the previous month's reading was revised up to 167,000 from the originally reported gain of 151,000. Although the report suggested the economic expansion was still remaining on track, the chances of an interest rate hike at the Federal Reserve's policy meeting next month decreased markedly.
However, the odds of a December rate remained quite high, despite the disappointing, despite today's disappointing jobs report. The unemployment rate grew to 5.0% in September, as more Americans re-joined the labor force. Average hourly wages rose to an annualized rate of 2.6% last month, in line with analysts' expectations, whereas the average work week grew 0.1 to 34.4 hours. A broader measure of unemployment, which includes part-time workers and people who stopped searching for jobs, held steady at 9.7% in September. Professional and job services created 67,000, health care and restaurants added 33,000 and 30,000 jobs, respectively, contributing most to the September job growth.
Tuesday brings no important data
There are not any significant events to impact the USD/JPY pair's performance today, but early morning tomorrow the Japanese Core Machinery Orders are due, which could cause some volatility. They are the total value of machinery orders placed at major manufacturers in Japan. They are legally binding contracts between consumers and producers for delivering goods and services. The report is considered the best leading indicator of business capital spending, and increases are indicative of stronger business confidence and, therefore, the larger the number is, the positive it tends to be for the currency, while a negative reading is understood as a drop down in growth. Furthermore, on Wednesday the FOMC Meeting Minutes are due. FOMC stands for the Federal Open Market Committee, that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.USD/JPY struggles to reclaim 104.00
As was anticipated, the immediate resistance cluster around 103.75 managed to prevent the USD/JPY currency pair from edging higher. Nevertheless, the Greenback is in for another rally against the Yen today, but with the 104.00 level remaining a strong psychological resistance. The pair could still encounter resistance even if the 104.00 level is retaken, as a relatively strong supply area rests around 104.34, formed by the Bollinger band and the weekly R1. At the same time, the bottom floor is represented by the weekly pivot point at 102.78.Daily chart
The Greenback was close to reconfirming the up-trend yesterday, but with the rebound occurring slightly earlier. The USD/JPY pair is still expected to move lower and put the trend-line to the test within the next two days. A breach is unlikely, as the 200-hour SMA is now bolstering the up-trend.
Hourly chart
Market sentiment remains slightly bullish, as 58% of traders hold long positions today. Meanwhile, all pending orders are equally divided between the buy and the sell ones.
Meanwhile, there has been a decrease in the number of long positions at other brokers. Right now 53% of OANDA clients are bulls, the same as on Monday. Saxo Bank clients, however, are slightly less bullish than on Monday, being that the portion of longs now takes up 57% of the market.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar
According to the poll that gathered forecasts between September 11 and October 11, traders expect the US Dollar to appreciate to 104.75 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 78% of all forecasts fall above 102 yen, which is close to the current spot price. By far the most popular interval is 108.00-109.50, chosen by 19% of all the surveyed, compared to popularity of the 105.00-106.50, 106.50-108.00 and 109.50-111.00 intervals.