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USD/JPY Looks Towards Resistance on Improved US Services Activity

By Baruch Spier
05 May 2014 14:49 GMT

Talking Points:

  • US ISM Non-Manufacturing reaches a 9-month high
  • US PMI Services improved from earlier April reading
  • USD/JPY heads towards resistance

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Actual

Expected

Previous Estimate

Prior

US ISM Non-Manufacturing Composite (APR)

55.2

54.0

53.1

US ISM Non-Factory Employment (APR)

51.3

53.6

US Markit Services PMI (APR F)

55.0

54.5

54.2

55.3

US Markit Composite PMI (APR F)

55.6

54.9

55.7

The US Dollar rallied in Forex markets after the Markit Services PMI was revised higher from a previous estimate, and the greenback took further gains again after the release of the US ISM Non-Factory index at a 9-month high and above expectations. The two similar surveys, ISM and PMI, each indicated continued expansion in the respective US services and non-factory industries during the month of April.

Expanding sector activity indicates likely improvements in upcoming US economic growth. The Fed announced last week in its April statement that economic growth picked up since March, and the continuation of the current taper pace depends on future economic releases. That’s why indications of economic expansion are bullish for the US Dollar.

USD/JPY 1-Minute: May 5, 2014

USD/JPY Looks Towards Resistance on Improved US Services Activity

The US Dollar rose about 15 pips against the Japanese Yen after the PMI release, and USD/JPY may continue to find resistance by the 102.70 level. Technical Strategist Jamie Saettele says the USD/JPY rally from the February low makes 104.12 important from a bigger picture bearish perspective. See Jamie’s weekly chart below and read here.

USD/JPY Weekly by Jamie Saettele

USD/JPY Looks Towards Resistance on Improved US Services Activity

Charts created by Baruch Spier and Jamie Saettele using Marketscope 2.0. Add DailyFX Support/Resistance to your charts at FXCM Apps.

-- Written by Baruch Spier, DailyFX Research. Feedback can be sent to bbspier@fxcm.com .

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05 May 2014 14:49 GMT