USDJPY Shrugs Off Mixed PMI Data Trump on Tap

After turning in the strongest performance among the major currencies yesterday, the US dollar is once again near the top of the relative strength charts today.

After turning in the strongest performance among the major currencies yesterday, the US dollar is once again near the top of the relative strength charts today.

Today’s fundamental data showed slight slowdown in US growth, though the world’s largest economy is still attracting capital in a classic best-house-in-a-bad-neighborhood trade. Specifically, the ISM Non-Manufacturing PMI reading printed at 56.7, just below the 57.1 reading expected by economists and down from last month’s 58.0 print.

Delving deeper into the report, most subcomponents saw slower growth than last month, with many respondents citing uncertainty around the government shutdown as a major concern. New Export Orders saw their biggest decline (-9 points) to the worst level in two years, underscoring concerns about global trade. That said, the Employment subcomponent of the report rose a point to 57.8, supporting the strong jobs report from Friday (see “NFP Instant Insight: Strong Jobs Report Not Enough to Bring “Patient” Fed Off the Sidelines” for more).

Technical View: USD/JPY

The US dollar quietly tagged its highest level of the year against the Japanese yen above 110.00 yesterday, though rates have spent the last 24 hours consolidating around that key psychological level. Late last week, the pair formed a small “Morning Star” candlestick pattern, signaling a shift from selling to neutral to buying pressure and marking a possible near-term low near 108.50.

Moving forward, traders will key in on tonight’s State of the Union speech from President Trump for any market-moving tidbits, specifically around US-China trade negotiations, the prospect of another government shutdown next week, and of course, the wall along the Southern border. Beyond that, there’s little in the way of scheduled economic data, so USD/JPY’s price action may be driven by flows in the equity market.


Source: TradingView,

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account