- The share of buy orders edged up from 45 to 51%
- 59% of all open positions are short
- Immediate resistance lies at 114.01
- The closest support rests around 113.25
- Upcoming events: US Services PMI, US Labor Market Conditions Index
The US unemployment rate fell to a nine-year low in November, adding to expectations that US interest rates will rise later this month. Figures from the Labor Department showed the US economy created 178,000 jobs in November, while the jobless rate fell to 4.6% from 4.9% in October. The first employment report since voters went to the polls last month shows an economy in strong shape as President-elect Donald Trump prepares to take office. The unemployment rate fell to levels not seen since August 2007, before a bubble in the U.S. housing market began to burst. The fall was driven partly by the creation of new jobs and partly by people retiring and otherwise leaving the labor force.
In addition, average hourly earnings in the US fell more-than-expected last month touching a seasonally adjusted -0.1%, from 0.4% in the preceding month. The data release comes ahead of the Fed's meeting, when the central bank is expected to announce its first interest rate increase in a year. Although wages fell slightly in November, many economists view the steady wage gains of the earlier months as a sign that a tightening labor market is allowing workers to demand higher pay, increasing pressure on the Fed to head off inflation by hiking interest rates.
US Services PMI is the only relevant event today
The US Services PMI is released by both the Institute for Supply Management and the Markit Economics. It captures business conditions in the US services sector. As the services sector dominates a large part of total GDP, the Services PMI is an important indicator of the overall economic condition in the US.USD/JPY takes another shot at conquering 114.00
The USD/JPY pair was unable to post anymore gains at the end of the previous week, once again crossing the 114.00 threshold to the downside. Nevertheless, technical studies point to a clear bullish development this week, suggesting the US Dollar is to make a U-turn today. Indeed, the weekly pivot point just below today's opening price is providing rather strong support, which could help the Buck regain the bullish momentum. However, the USD/JPY currency pair is still required to retake the 114.00 mark, meaning the 23.60% Fibo there needs to be pierced. In case the Greenback is successful, the next target will be the weekly R1 at 115.14.Daily chart
The USD/JPY currency pair is still struggling at posting solid gains, as the exchange rate began sliding down again last week. However, support, represented by the 200-hour SMA, appears to be sufficient for the pair to retain its bullish trend; therefore, the 114.00 mark could be reclaimed.
Hourly chart
Traders remain bearish on the US Dollar, being that 59% of all open positions are short. The share of buy orders edged up from 45 to 51%.
Meanwhile, there has been an increase in the number of long positions at other brokers. Right now 57% of OANDA clients are bears, compared to 60% on Friday. In the meantime, Saxo Bank clients also remain slightly on the bearish side, being that the portion of shorts takes up 52% of the market.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar
According to the poll that gathered forecasts between November 05 and December 05, traders expect the US Dollar to appreciate to 110.52 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 63% 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 18% of the survey participants choosing that trading range. Meanwhile, the second most popular intervals are the 105.00-106.50, the 112.50-114.00 and the 117.00-118.50 ones, all chosen by 11% of all the surveyed.