USD/JPY May Start a Bearish Retracement Amid a Soft US ISM Manufacturing PMI Reading

Japan – Final Manufacturing PMI

On Tuesday, at GMT 12:30 a.m., the Markit released Japan’s final manufacturing purchasing managers’ index (PMI) figure. It measures the level of a diffusion index by surveying around 400 purchasing managers in the country.

Businesses are the first to react to changing economic climate. The manufacturing PMI is calculated based on survey questions covering employment, production, price levels, new orders situation. Also, it is based inventory conditions. Hence, binary options traders consider this data to be a leading indicator of the overall economic health of the country.

Last month, the Japan’s final manufacturing PMI reading came out at 53.3. The forecast for this month was set at a reading of 53.3 as well. However, the actual final PMI reading came out slightly higher, at 53.8.

United States – Institute for Supply Management (ISM) Manufacturing PMI

On Tuesday, at GMT 2:00 p.m., the Institute for Supply Management released its manufacturing PMI figure for the United States. The ISM’s US manufacturing PMI measures the level of a diffusion index based on a survey of 400 purchasing managers.

Purchasing managers in the United States are involved in the supply side of the economy. As most companies reduce their expenses and production based on their sales forecast, the survey of purchasing managers reveals the overall optimism of various companies in the country. Hence, binary options investors can easily figure out the sentiment regarding the economic condition in the country from the ISM manufacturing PMI readings.

Last month, the ISM manufacturing PMI for the United States came out at 59.3. The forecast for this month was that it may come at 58.4. However, the actual figure reading came out slightly lower, at 57.3.

USD/JPY Forecast

Since breaking above the downtrend line on March 28, the USD/JPY has climbed up by around 300 pips. However, after reaching near the 109.75 level, analysts were expecting it to find a strong resistance. Nonetheless, earlier this week, the USD/JPY broke and closed above the resistance near the 109.75 level.

The Japanese Final Manufacturing PMI reading came out better-than-expected at 53.8. Moreover, the US ISM Manufacturing PMI came out at 57.3, much lower than the consensus forecast of 58.4. We believe it would set a bearish fundamental outlook for the USD/JPY this week. Therefore, if the USD/JPY closes below the 109.75 level, it would likely attract additional bearish momentum in the market.

Hence, US binary options traders should look out for trading opportunities below this major pivot zone around 109.75.

BTC/USD Forecast

The BTC/USD remained bearish for the last few months. However, on April 12, the bitcoin price finally broke above the downtrend line. Over the last few weeks, the BTC/USD has climbed up by over a 1,000. However, after reaching near the 9900 level, it found a strong resistance.

Earlier on May 1, State Council of taxation of France announced to lower capital gains taxes on bitcoin and other cryptocurrencies from 45% to 19%. The Finance Minister of France said that Initial Coin Offerings (ICO) will bring new opportunities to French startups to raise funds and he is willing to lower taxes to boost the blockchain based industry in the country.

Such positive developments regarding bitcoin trading will certainly lift the spirit of bitcoin traders and certainly have a bullish effect on the price.

Hence, US bitcoin traders should look out for trading opportunities above this major resistance around the 9900 level.

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