- The USD continues to lose against the Japanese Yen.
- The US ISM PMI manufacturing price index jumped to 78.1 from 68.1.
- USD/JPY is biased to the upside, despite a 1% drop since Friday of last week.
During the American session, the USD/JPY extends its losses to three days, losing 0.26%. At press time, the pair is trading at 114.78, after a better-than-expected US Manufacturing ISM report. Market sentiment is mixed. European stock indices rise while US stock indices fall after the ISM.
Meanwhile, the 10-year US Treasury yield is up two basis points to 1,804% after US ISM.
US ISM manufacturing report came out better than expected
On Tuesday, the Institute for Supply Management (ISM) reported the manufacturing PMI for January. The 57.6 figures, better than the 57.5 forecast, showed that the US economy continues to expand. However, the manufacturing price index beat forecasts, rising to 76.1 from the 68.1 estimate, further cementing the Fed’s rate hikes in 2022.
Minutes before ISM PMI, the US IHS Manufacturing PMI came in at 55.5, slightly above the 55.0 estimate.
Meanwhile, before the American session began, Philadelphia Fed President Patrick Harker made a statement. Harker commented that the Fed is not behind the curve and expects a rate hike of 25 basis points, four in the year. Regarding balance sheet reduction, he said the US central bank could start quantitative tightening (QT) once federal funds rates (FFR) reach 1% to 1.25%.
USD/JPY Price Forecast: Technical Outlook
USD/JPY has a bullish bias despite solid resistance around the 115.50-70 area, courtesy of a five month old uptrend line, former support turned resistance. A break of the latter would expose the yearly high at 116.35, followed by the Jan 3, 2017 high at 118.61.
On the other hand, the first support level for USD/JPY would be the daily low of Jan 27 at 114.47, followed by the 50-day moving average (DMA) at 114.33 and then 114.00.
Technical levels
Source: Fx Street
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
