- The number of sell orders increased from 44 to 55%
- 58% of traders re long today
- The nearest resistance is located around 103.75
- The closest support rests at 102.78
- Upcoming events: Japanese Current Account, US Federal Budget Balance, US Labor Market Conditions Index
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.
Another quiet Monday
There are no important events to influence the USD/JPY on Monday, but early morning on Tuesday the Japanese current Account is due. The Current Account is a net flow of current transactions, including goods, services, and interest payments into and out of Japan. A current account surplus indicates that the flow of capital into Japan exceeds the capital reduction. A current account deficit indicates that there is a net capital outflow from these sources. 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 risks falling back under 103.00
The bearish scenario prevailed on Friday, as the USD/JPY currency pair not only dropped under the anticipated 103.50 level, but even returned under the 103.00 mark. The US Dollar, however, opened with a small bullish gap today, but even this is insufficient to be certain of today's bullish outcome. Another sign is the technical indicators, they are now giving bullish signals, also suggesting the pair is to edge higher. On the other hand, a tough resistance cluster rests around 103.75, which is likely to limit any possible gains. Having opened above 103.00 level, the Buck could still decline, as the nearest support is located only at 102.78.Daily chart
According to the hourly chart, the USD/JPY currency pair has been climbing higher for two weeks in a row now. However, the trend-line requires an additional confirmation in order to fully confirm the bullish trend. The confirmation is expected to occur within three days, unless bears take over and spark more USD-selling.
Hourly chart
There are still 58% of traders being long today, compared to 56% on Friday. At the same time, the number of sell orders increased from 44 to 55%.
Meanwhile, there has been a decrease in the number of long positions at other brokers. Right now 53% of OANDA clients are bulls, compared to 60% on Friday. Saxo Bank clients, however, are more bullish than on Friday, being that the portion of longs now takes up 59% 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 10 and October 10, traders expect the US Dollar to appreciate to 104.77 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.