- The portion of buy orders edged up from 42 to 46%
- 62% of traders have a negative outlook towards the Greenback
- Immediate resistance lies at 114.01
- The closest support rests at 112.48
- Upcoming events: Japanese Household Spending, Japanese Retail Sales, Japanese Unemployment Rate, US Preliminary GDP, US CB Consumer Confidence, FOMC Members Dudley and Powell Speeches
New orders for US manufactured durable goods rose markedly last month, driven by higher demand for machinery and other equipment, official figures revealed on Wednesday. Overall, new orders for capital goods jumped 4.8% in October, according to the US Department of Commerce. Meanwhile, market analysts anticipated a slight acceleration to 1.2%. The September figure was revised down from -0.1% to -0.3%. Demand for transportation equipment jumped 12% during the reported month, the largest gain since October 2015. Back in September, new orders for transportation equipment climbed 0.4%. Excluding orders tied to transportation, core durable goods orders increased 1.0%, following September's downwardly revised gain of 0.1% and surpassing the 0.2% rise market forecast. The US economy is set to expand at a 3.6% annual pace in the Q3, after growing 2.9% in the previous quarter.
Separately, the Department of Labor reported on Wednesday the number of Americans filing for unemployment benefits increased to 251,000 in the week ending November 18, up from the prior week's 233,000, whereas analysts expected a milder rise to 241,000.
Overall Japanese Household Spending and US GDP on Tuesday
Today there are no events from the US side, thus all focus shifts to the Japanese data, such as the Overall Household Spending. It is an indicator that measure the total expenditure by households. The level of spending can be used as an indicator of consumer optimism. It is also considered as a measure of economic growth. However, on Tuesday traders can focus on the US GDP reading, as it shows the monetary value of all the goods, services and structures produced within a country in a given period of time. GDP is a gross measure of market activity, because it indicates the pace at which a country's economy is growing or decreasing. Another possible event will be the US CB Consumer Confidence, which captures the level of confidence that individuals have in economic activity. A high level of consumer confidence stimulates economic expansion, while a low level drives to economic downturn.USD/JPY on the edge of breaking the three-week channel pattern
The US Dollar remained relatively unchanged against the Japanese Yen on Friday, although the ascending channel's support line was put to the test that day. Today the pair opened with a small bearish gap, also with risk-aversion kicking in, causing the Buck to erase most of last week's losses. However, technical studies keep emitting bullish signals, suggesting that the USD/JPY pair still has a chance to recover from intraday losses and preserve the channel pattern. On the other hand, if demand at 112.48, namely the weekly PP, fails to trigger a rebound, then the cluster circa 111.00 will be the main target.Daily chart
Even though the USD/JPY currency pair remained within the borders of the ascending channel pattern on Friday, a relatively sharp bearish development caused the Buck to fall below 112.00. The 200-hour SMA slightly above the 111.00 mark is providing support, but it is uncertain whether it will be able to prevent the US Dollar from sustaining more losses this week.
Hourly chart
There are 62% of traders with a negative outlook towards the Greenback today, compared to 70% on Friday. At the same time, the portion of buy orders edged slightly up, namely from 42 to 46%.
Meanwhile, there has been a small no change in the number of long positions at other brokers. Right now 58% of OANDA clients are bears, the same as on Friday. In the meantime, Saxo Bank clients also remain slightly on the bearish side, being that the portion of shorts takes up 51% 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 28 and November 28, traders expect the US Dollar to appreciate to 109.19 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 51% of all forecasts fall above 108 yen, which is close to the current spot price. The majority of people voted expect the US Dollar to cost somewhere between 111.00 and 112.50 yen in three months, with 19% of the survey participants choosing that trading range. Meanwhile, the second most popular interval is the 105.00-106.50 one, chosen by 15% of all the surveyed, compared to popularity of the 106.50-108.00, 108.00-109.50 and 109.50-111.00 intervals.