- The number of buy orders slid from 57 to 53%
- Market sentiment remains in perfect equilibrium.
- Immediate resistance lies at 115.28
- The closest support rests around 113.80
- Upcoming events: US President-Elect Trump's Speech
US homebuilding activity advanced more than expected in the last month of 2016, official figures revealed on Thursday. The Commerce Department reported housing starts rose 11.3% to a seasonally adjusted annual pace of 1.23 million in December, following the previous month's upwardly revised 1.10 million units and surpassing analysts' expectations for a 1.19 million-unit rate. The December increase suggested the housing market boosted economic growth in the Q4. Meanwhile, building permits came in at a seasonally adjusted annual pace of 1.21 million units in the same month, unchanged from November's upwardly revised reading, slightly missing economists' projections of a 1.22 million-unit rate.
Separately, the Philadelphia Federal Reserve said its Manufacturing Index jumped to 23.6 points in January, the highest level in more than two years, driven by a rise in new orders, which climbed to 26.0 from 14.90. Analysts anticipated a sharp fall to 16.2 points in January from the prior month's 21.5. Data also showed the Employment Index surged to 12.8 from 3.6, while the Business Outlook Index for the next six months hit its highest level since August 2014 of 56.6 points. Other data released on Thursday showed initial jobless claims fell 15,000 to 234,000 last week, the lowest level in more than 43 years.
Trump's Speech in focus
There are no important economic data releases today, but, nevertheless, the most impact is expected to be from US President-Elect Trump's Speech. His comments have previously strengthened the US Dollar at some point, while also having a negative effect when no hints concerning some policy details were provided. His inauguration speech brings a lot of uncertainty to the markets and for USD pairs specifically.USD/JPY takes another shot at breaking the down-trend
The USD/JPY currency pair barely edged higher yesterday, therefore, preserved the bearish trend-line. Technically, the US Dollar should weaken against the Japanese Yen today in order for the trend-line to remain credible. The pair faces two relatively strong supports on its path, the monthly S1 and the 20-day SMA around 113.80, and the weekly S1 and the lower Bollinger band just on top of the 113.00 mark. Both this areas could limit the intraday losses, but upside risks are also present today. The main target from above is the second trend-line at 117.44, but first the Greenback is required to climb over the monthly PP at 116.20.Daily chart
Ultimately, the 200-hour SMA failed at holding the US Dollar from advancing yesterday, with allowed the down-trend to be put to another test. Although there are signs of the trend-line causing another U-turn, most bets are on the down-trend getting breached.
Hourly chart
For the fourth day in a row market sentiment remains in perfect equilibrium. The number of buy orders, however, slid from 57 to 53%.
Right now 50% of OANDA clients are bears, compared to 51% on Thursday. In the meantime, Saxo Bank clients are barely managing to remain on the bullish side, being that 51% of their open positions are now long and the remaining 49% are short.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar
According to the poll that gathered forecasts between December 20 and January 20, traders expect the US Dollar to appreciate to 118.88 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 62% of all forecasts fall above 117 yen, which is above the current spot price. The majority of people voted expect the US Dollar to cost somewhere between 123.00 and 124.50 yen in three months, with 17% of the survey participants choosing this trading range. At the same time, the second most popular intervals were the 111.00-112.50 and the 124.50-126.00 ones, with 14% of survey participants choosing them.