- The share of buy orders increased from 55 to 73%
- 65% of traders are long the US Dollar
- Immediate resistance lies around 105.44
- The closest support rests at 104.71
- Upcoming events: US Crude Oil Inventories, Japanese Core Machinery Orders
US private companies added fewer than expected jobs last month, whereas the unemployment rate improved slightly, the October Non-Farm Payrolls report showed on Friday. According to the Bureau of Labor Statistics, the US economy created 161,000 new jobs in the reported period, while market analysts expected non-farm payrolls to increase by 174,000. Meanwhile, the September gain was revised up to 191,000 from the originally reported 156,000. However, the odds of a December rate remained quite high, despite today's disappointing jobs report. Furthermore, average hourly earnings advanced 2.8% and 0.4% on annual and monthly basis, respectively, while average weekly remained unchanged at 34.4 last month. The unemployment rate declined unexpectedly to 4.9% in October, following the preceding month's 5.0%. After the release, the US Dollar declined slightly against other major currencies, trading at 1.1111 against the Euro and 103.10 against the Japanese Yen.
Separately, the Bureau of Economic Analysis said on Friday that the US trade deficit narrowed to $36.44 billion in the same month from September's gap of $40.46 billion, which was revised up from the originally reported $40.70 billion deficit. Economists expected the US trade gap to decrease to $37.80 billion during October.
Quiet Wednesday in terms of fundamental data
There are no important economic data releases from the US today, with the US election results having the most impact, but from the Japanese side attention could be paid to the Machinery Orders. 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, as 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.USD/JPY plunges on Trump's victory
The USD/JPY currency pair climbed over the 105.00 psychological level on Tuesday, with trade closing within the levels forming the nearest resistance cluster. The pair made a sharp U-turn earlier today and dropped more than 400 pips due to Donald Trump winning the election polls. The market's initial reaction was rather harsh, but the situation is expected to stabilise later through the day. The US Dollar is expected to remain in the red zone today, but there is a solid chance of the American Dollar could still recover and close around the 104.00 level. Meanwhile, technical indicators are giving bullish signals, unable to confirm the outlook.Daily chart
The US Dollar's bullish trend was put to an end after the US election results were clear, with the Buck slumping towards 101.20 against the Yen. Even though the pair is on the road of recovering some of these losses, the 200-hour SMA, now around 104.00, is to prevent a full recovery.
Hourly chart
Today 65% of traders are long the US Dollar (previously 58%), while the share of buy orders increased from 55 to 73%.
Meanwhile, there has been an increase in the number of long positions at other brokers. Right now 57% of OANDA clients are bulls, compared to 56% on Tuesday. In the meantime, Saxo Bank clients are slightly less bullish than on Tuesday, being that the portion of longs now takes up 51% of the market.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar
According to the poll that gathered forecasts between October 09 and November 09, traders expect the US Dollar to appreciate to 105.85 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 72% of all forecasts fall above 102 yen, which is close to the current spot price. The majority of people voted expect the US Dollar to cost more than 111.00 yen in three months, with 17% of the survey participants choosing that trading range. Meanwhile, the second most popular interval is the 105.00-106.50 one, chosen by 16% of all the surveyed, compared to popularity of the 106.50-108.00, 108.00-109.50 and 109.50-111.00 intervals.