- The portion of buy orders decreased from 55% to 54%
- Market sentiment remains bearish at 55%
- Immediate resistance lies around 118.90
- The closest support rests around 117.10
- Upcoming Events: US New Home Sales; Revised UoM Consumer Sentiment
New orders for US-made capital goods advanced more than expected in November due to strong demand for machinery and primary metals, suggesting some of the oil-related drag on manufacturing was starting to fade. According to the Commerce Department non-defense capital goods orders excluding aircraft, a went up 0.9% after an unrevised 0.2% gain in October. Moreover, there were increases in orders for electrical equipment, appliances and components, as well as computers and electronic products. A drop in oil prices last year, together with a surge in the dollar, pressured manufacturing. Much of the impact has been through weak business spending on equipment, which has contracted for four consecutive quarters. However, with oil prices hovering above $50 per barrel, manufacturing, which accounts for 12% of the US economy, is starting to perk up. In the meantime, the US economy soared at a faster pace last quarter than previously estimated, but the stronger gains only help bring the year's growth rate back in line with the long, sluggish expansion. According to the Commerce Department the US GDP expanded at an inflation- and seasonally adjusted annual rate of 3.5% in the third quarter.
Existing home sales in the United States rose for the third consecutive month in November, surprising markets and hitting their highest level for almost a decade. According to the National Association of Realtors, home resales advanced 0.7% to an annualized rate of 5.61 million units in the reported period, following October's downwardly revised rate of 5.57 million, surpassing analysts' expectations for a slight decline of 1.0% to a 5.52 million-unit pace and reaching the highest since February 2007. On an annual basis, sales increased 15.4% in November. According to the latest data published by Freddie Mac, the fixed 30- year mortgage rate has climbed around 60% to an average rate of 4.16% since Donald Trump's victory in the US presidential election. Moreover, mortgage rates are likely to go even higher after the Fed rose its key interest rate to 0.75% from 0.50% last week as well projected three more hikes in 2017. Separately, the Energy Information Administration announced on Wednesday a 2.3 million barrel increase in US crude oil inventories during the week ending December 16, while market analysts anticipated a decline of 2.4 million barrels, following the preceding week's 2.6 million barrel slip.
Minor US Data before Christmas
After the huge data dump on Thursday there are still some leftovers coming from the US. New US Home Sales and the Revised UoM Consumer Sentiment index are set to be released at 15:00 GMT. Both of these data releases are rated as medium impact by many in the markets. However, in the recent six months they have not made a single notable impact on the markets.USD/JPY remains unchanged
The US Dollar traded almost flat against the Japanese Yen on Friday morning, as it still remained above the weekly PP, which is located at 117.14. Previously, during Thursday's trading session the currency exchange rate remained flat, as it had not changed at all by the end of the session. Moreover, it had fluctuated equally both to the upside and the downside. Previous forecasts of a surge still remain in force. The reason for the stagnation is that tomorrow is Christmas, and many have already ended their trading. So happy holidays and a nice weekend from Dukascopy to you also!Daily chart
The hourly chart reveals that the USD/JPY currency exchange rate is still being pressured by the 55 and 100-hour SMAs lower. However, that is set to change, as the pair is approaching the combined support level of the 200-hour SMA and the weekly pivot point at 117.14. The combined support level might not only stop a fall, but effectively reverse the rates direction.
Hourly chart
SWFX traders remain 55% short on the pair. Meanwhile, 54% of trader set up orders were to buy the US Dollar.
Meanwhile, there has been a decrease in the number of long positions at other brokers. Right now 55% of OANDA clients are bears, compared to 53% on Thursday. In the meantime, Saxo Bank remain neutral regarding the pair.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar
According to the poll that gathered forecasts between November 23 and December 23, traders expect the US Dollar to appreciate to 116.09 yen in three months' time, while the forecast for November 30 was only 103.30 yen. It is also worth noticing that 70% of all forecasts fall above 114 yen, which is close to the current spot price. The majority of people voted expect the US Dollar to cost somewhere between 120.00 and 121.00 yen in three months, with 14% of the survey participants choosing this trading range.