- US stocks fell in the previous session after poor manufacturing data.
- The US ISM manufacturing PMI came in at 47.2, below the forecast of 47.5.
- Economists expect US employers to add 165,000 workers in August.
USD/JPI price analysis shows a change in sentiment for the pair as the yen strengthens on safe-haven demand. Bad US data overnight sparked fears of a recession, leading to a scramble for security. At the same time, the dollar strengthened significantly except against the yen.
–Are you interested in learning more about day trading brokers? Check out our detailed guide-
US stocks fell in the previous session after poor manufacturing data spooked investors. Appetite for risky assets fell, while for safe-haven assets such as the yen and the US dollar soared. Data on Tuesday revealed that business activity in the US manufacturing sector was below expectations. The ISM manufacturing PMI came in at 47.2, below the forecast of 47.5, raising fears of a hard landing by the Fed. Figures below 50 indicate contraction in the sector.
Following the report, U.S. Treasury yields fell, indicating increased expectations for a rate cut by the Fed. On the other hand, the yield-sensitive yen strengthened. At the same time, the dollar, which is also seen as a safe haven in times of uncertainty, rose against other major rivals.
The market turmoil comes ahead of a slew of U.S. employment data, including job openings and jobless claims. However, the headliner is Friday’s non-farm payrolls report. This will show the state of the labor market and whether the Fed will implement a small or large rate cut in September.
Economists expect US employers to add 165,000 workers in August. At the same time, they expect the unemployment rate to decrease from 4.3% to 4.2%.
USD/JPI Key Events Today
USD/JPI Price Technical Analysis: 0.618 Fib prompts bearish takeover
On the technical side, the price of USD/JPI has fallen below the 30-SMA, indicating a change in sentiment to the downside. Initially, the bulls were in control, pushing the price to the 0.618 Fib level. However, they failed to break above this level, allowing the bears to take over.
–Are you interested in learning more about automated trading? Check out our detailed guide-
The price broke below the SMA and the RSI is now below 50. However, the bears need to break away from the SMA and start making lower highs and lows to confirm the bearish trend. In that case, the price is likely to break below the 144.00 support to retest the 142.03 support level.
Do you want to trade Forex now? Invest in eToro!
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing money.
