- The portion of buy orders dropped to 60%.
- 60% of traders are long the Buck
- The nearest resistance is located at 104.95
- The closest support rests around 103.80
- Upcoming events: Japanese Adjusted Merchandise Trade Balance, Japanese Nikkei Manufacturing PMI, US Markit Manufacturing PMI
Manufacturing activity dropped less than expected in the Third Federal Reserve District, a monthly report revealed on Thursday. The Philly Fed's Manufacturing Index came in at 9.7 in October, compared to last month's 12.8, while market analysts anticipated a steeper decrease to 5.2 during the reported period. However, the three-month average rose to 8.2 in October from the previous month's 2.7 points.
Furthermore, the six-month outlook advanced to 38.6 from September's 35.2. Other data released by the US Department of Labor showed the number first-time claims for state unemployment benefits increased 13,000 to a seasonally adjusted 260,000 in the week ended October 15, following the preceding week's upwardly revised figure of 247,000 and falling behind the 251,000 market forecast. Filings for US unemployment benefits remained below the 300,000 level for the 85th consecutive week, the longest streak since 1973. The increase in initial claims was partly due to Hurricane Matthew, which caused flooding and damage in the Southeast region. The four-week moving average, considered as a better measure of labor market trends, jumped 2,250 to 251,750 last week. Moreover, continuous claims rose 7,000 to 2.06 million in the week ending October 8.
Uneventful Friday
There are no fundamental events that could have a strong impact on the USD/JPY pair on Friday, but early on Monday the Japanese Adjust Merchandise Trade Balance is due. It is a seasonal measure of balance amount between import and export. A positive value shows a trade surplus, while a negative value shows a trade deficit. Japan is so much dependent on exports. Later on Monday the US Markit Manufacturing PMI will be released. It captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the Manufacturing PMI is an important indicator of business conditions and the overall economic condition in the United States. Readings above 50 imply the economy is expanding, making investors understood it as bullish for the USD, whereas a result below 50 points for an economic contraction, and weighs negatively on the currency.USD/JPY to prolong the consolidation trend
Even though the USD/JPY pair was able to climb over the weekly PP, the 104.00 level was still not overcome. The pair struggled to edge above the 104.00 through all of the week and, despite bullish technical indicators, Friday is unlikely to be different. Consequently, the Greenback is expected to weaken against the Japanese Yen again, completely ignoring the immediate support area. The 103.35 level is seen as the bottom floor, although no impetus that can push the exchange rate so low is present today. On the other hand, there is still room for a small rally towards around 104.20, as the pair has been consolidating between 103.33 and 104.22 for two weeks in a row now.Daily chart
Despite the 200-hour SMA bolstering the down-trend, the USD/JPY pair had no trouble piercing it and climbing over the 104.00 level. However, the pair is still having trouble edging higher, with bears constantly taking over. A possible ascending channel could help predict the pair's further movements, but risks of a downside breach are still high.
Hourly chart
Today 60% of traders are long the Buck, compared to 61% yesterday. The portion of buy orders lost 2% points, having fallen to 60%.
Meanwhile, there has been another decrease in the number of long positions at other brokers. Right now 53% of OANDA clients are bulls, compared to 54% on Thursday. Saxo Bank clients, however, are slightly less bullish than on Thursday, being that the portion of longs now takes up 57% 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 21 and October 21, traders expect the US Dollar to appreciate to 104.80 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 75% 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 20% of all the surveyed, compared to popularity of the 105.00-106.50, 106.50-108.00 and 109.50-111.00 intervals.