- The number of orders to sell the Buck increased from 46 to 69%
- 62% of traders have a positive outlook towards the US Dollar today
- Resistance rests at 101.76
- Solid support at 100.70 (50% FIbo plus 2014 low and weekly S1)
- 54% of the survey participants expect the US Dollar to cost less than 108.00 yen in three months
- Upcoming events: US Jobless Claims, US Import Price Index, US Mortgage Delinquencies, US Retail and Core Retail Sales, US PPI and Core PPI, Reuters/Michigan Consumer Sentiment
The number of job openings in the United States increased more than expected during the sixth month of the year, official data showed on Wednesday. According to the US Department of Labor, the number of positions waiting to be filled rose to 5.62 million in June, following last month's upwardly revised figure of 5.51 million. Market analysts anticipated a slight increase to 5.52 million in the reported month. Furthermore, there were 5.1 million hires and 4.9 million separations with 2.9 million quits in June. The JOLTS report is closely followed by Federal Reserve chair Janet Yellen, who often cites it when assessing the state of the labour market.
US crude oil inventories rose for the third consecutive week, surpassing analysts' expectations, the weekly report from the Energy Information Administration revealed on Wednesday. US commercial crude inventories increased by 1.1 million barrels in the week ended August 5, following the 1.4 million barrel rise posted in the previous seven days. Meanwhile, markets expected a decrease of 1.3 million barrels in the reported period. Recently, the International Energy Agency revised up significantly its 2017 global oil demand growth forecast to 97.4 million barrels per day, whereas the World Bank downgraded its 2016 global growth forecast to 2.4% from January's 2.9%
US Import Price Index and Initial Jobless Claims are the only relevant events
For another day there are no important events from the Sterling's side of the calendar, whereas from the Greenback's the Import Price Index and the Initial Jobless Claims are due. The Import Price Index informs the changes in the price of imported products into the US. The higher the cost of imported goods, the stronger the effect they will have on inflation, redunding in a higher probability of a rate rise. The Initial Jobless Claims 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.USD/JPY trades in murky waters
The US Dollar put the 101.00 major level to the test on Wednesday, but closed trade above that area, registering a 62-pip loss. Another decline today is possible, as technical studies suggest, but the USD/JPY currency pair faces a strong support cluster around 100.70, represented by the 50% Fibo and the weekly S1. This cluster is likely to limit the losses if those occur, but it should also indicate that a rebound is due. However, no substantial gains are expected, with the ceiling being the 102.00 mark, unless the nearest resistance, namely the weekly PP, at 101.76 succeeds in holding the gains first.Daily chart
The USD/JPY pair remained between the 50% Fibo and the three-week down-trend yesterday and is expected to remain in the same trading range today. The 200-hour SMA also keeps providing resistance around 101.70, bolstering the resistance that of the daily chart, thus, a rally beyond this area is doubtful.
Hourly chart
Slightly more traders now have a positive outlook towards the US Dollar today, namely 62% (previously 59%). At the same time, the number of orders to sell the Buck increased from 46 to 69%.
Sentiment at Saxo Bank is virtually the same - 68% of the Denmark-based clients are currently holding long positions. Traders at OANDA are even more confident in Dollar's appreciation - as many as 69% of open positions are long. Using the data as a contrarian indicator, the sentiment implies a cheaper Dollar. There is little room for new buyers to enter the market, and if the bulls start closing positions on profit-taking, this could create a strong selling pressure.
Spreads (avg, pip) / Trading volume / Volatility
Slightly more than a half expect the exchange rate to fall below 108.00 yen
Slightly more than half of the surveyed (54%) now assume that the US Dollar is to cost less than 108.00 yen after a three month time. The most popular choices, however, imply that the Greenback is to cost either between 108.00 and 109.50 yen or even more than 112.50 yen in three months, both selected by 16% of the voters. According to the votes collected between July 11 and August 11, the mean forecast for November 11 is 105.80. At the same time, 11% of the surveyed believe the Greenback could cost somewhere between 99 and 100.50 yen in three months.