- Pending orders are equally divided between the buy and the sell ones
- Market sentiment remains bullish at 60%
- Immediate resistance lies at 107.39
- The closest support rests at 106.50
- Upcoming events: FOMC Member Fischer's Speech, Preliminary UoM Consumer Sentiment, Japanese Preliminary GDP,
The number of Americans filing for unemployment aid dropped more than expect last week, official figures showed on Thursday. According to the US Department of Labor, initial jobless claims fell 11,000 to 254,000 in the week ended November 4, down from the preceding week's 267,000 filings, while market analysts anticipated an increase of 2,000 to 267,000. This marked the 88th week of initial claims below the 300,000 level, the longest streak since 1973. The four-week moving average of claims increased 1,750 to 259,750 in the reported week. Thursday's data also showed that continuing claims grew 18,000 to 2,041,000 in the week ending October 29, whereas their four-week moving average declined to 2,039,500, the lowest level since July of 2000. After the release, the EUR/USD pair fell 0.09% to 1.0902, whereas it touched its highest level of 1.1298 on Wednesday after the results of the presidential race were announced.
Last week's initial jobless claims together with the NFP report released on Friday have strengthened odds for a December rate hike, despite Donald Trump's surprise victory in the US Presidential elections, which sent shockwaves across the world.
No events on Friday
Final weekday after the US election and there are no significant events that could have a solid impact on the USD/JPY pair's performance today. However, on Sunday attention could be paid to the Japanese Preliminary GDP. The GDP shows the monetary value of all the goods, services and structures produced in Japan within a given period of time. GDP is a gross measure of market activity because it indicates the pace at which the Japanese economy is growing or decreasing. A high reading or a better than expected number is seen as positive for the JPY, while a low reading is negative.USD/JPY struggles to climb over 107.00
The Buck appreciated more than 100 pips against the Japanese Yen on Thursday, moving the opposite way of the expectations. The USD/JPY pair breached a strong resistance cluster yesterday, which is now providing immediate support, suggesting more bullish momentum is to follow. Technical indicators are bolstering this possibility, as they keep giving bullish signals in the daily timeframe; however, the 107.00 psychological level could be difficult to retake, as the pair was unable to edge beyond this area since July 2016. Consequently, downside risks persist, especially since longer-period technical studies shifted to the bearish side.Daily chart
Ever since Wednesday's sharp slump the US Dollar has been edging higher against the Yen, reaching the 38.20% Fibo and slightly overcoming it. The 107.00 mark is the closest psychological resistance now, a breach of which is to allow the Buck to keep climbing up. However, another surge might be difficult to achieve today, due to lack of fundamental market movers.
Hourly chart
Market sentiment remains bullish at 60% today, but all pending orders are now 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 56% of OANDA clients are bears, compared to 61% on Thursday. In the meantime, Saxo Bank clients are slightly less bullish than on Thursday, being that the portion of longs now takes up 50% 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 11 and November 11, traders expect the US Dollar to appreciate to 105.87 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 18% 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.