- The share of buy orders remains unchanged at 56%
- Market sentiment remains bullish at 62%
- Immediate resistance lies around 105.00
- The closest support rests circa 104.80
- Upcoming events: US Consumer Credit, US JOLTS Job Openings, US Presidential Election, Japanese Current Account
US private companies added fewer than expected jobs last month, whereas the unemployment rate improved slightly, the October Non-Farm Payrolls report showed on Friday. According to the Bureau of Labor Statistics, the US economy created 161,000 new jobs in the reported period, while market analysts expected non-farm payrolls to increase by 174,000. Meanwhile, the September gain was revised up to 191,000 from the originally reported 156,000. However, the odds of a December rate remained quite high, despite today's disappointing jobs report. Furthermore, average hourly earnings advanced 2.8% and 0.4% on annual and monthly basis, respectively, while average weekly remained unchanged at 34.4 last month. The unemployment rate declined unexpectedly to 4.9% in October, following the preceding month's 5.0%. After the release, the US Dollar declined slightly against other major currencies, trading at 1.1111 against the Euro and 103.10 against the Japanese Yen.
Separately, the Bureau of Economic Analysis said on Friday that the US trade deficit narrowed to $36.44 billion in the same month from September's gap of $40.46 billion, which was revised up from the originally reported $40.70 billion deficit. Economists expected the US trade gap to decrease to $37.80 billion during October.
Low impact data ahead of the US election
There is only one fundamental event on Monday that can have an impact on the USD/JPY pair's performance, namely the Consumer Credit Change. It is an amount of money that individuals borrowed. It shows if consumers can afford large expenses, which can fuel economic growth. However, a high figure may also indicate that the economy is overheating, as consumers borrow in order to live beyond their means.USD/JPY continues to edge higher
The USD/JPY currency pair inched higher on Friday, despite a poor reading of the US NFP, thus, retaking the 103.00 level. Moreover, today the pair opened with a significant bullish gap, amid Clinton leading in the US presidential elections once again. The Greenback is now supported by a strong cluster, represented by the 20-day SMA, the monthly and the weekly PPs around 103.85, which is to prevent the Buck from sliding back down. Consequently, with another rally today the US currency will be close no negating all last week's losses, with the weekly R1 at 104.71 being the main obstacle. Technical studies are unable to confirm the outlook, as they retain mixed signals.Daily chart
Ever since the 102.54 level was approached on Thursday, the US Dollars regained the bullish momentum. Moreover, due to the bullish gap, the USD/JPY pair managed to climb over the 200-hour SMA, suggesting that more bullish momentum is likely to follow.
Hourly chart
Although not as strong as on Friday, but market sentiment remains bullish at 62%. The share of buy orders remains unchanged at 56%.
Meanwhile, there has been a decrease in the number of long positions at other brokers. Right now 58% of OANDA clients are bulls, compared to 60% on Friday. In the meantime, Saxo Bank clients are slightly less bullish than on Friday, being that the portion of longs now takes up 55% 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 07 and November 07, traders expect the US Dollar to appreciate to 105.53 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 71% of all forecasts fall above 102 yen, which is close to the current spot price. By far the 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.