United States – Institute for Supply Management (ISM) Manufacturing PMI
Today, at GMT 2:00 p.m., the Institute for Supply Management will release 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 traders 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 58.8 and the forecast for this month is set at 57.9.
Japan – Average Cash Earnings
On Friday, at GMT 12:00 am, the Japanese Ministry of Health, Labour and Welfare released the year-over-year average cash earnings, which measures the changes in the total value of employment income collected by workers in the country over the past 12 months.
Since earnings are directly correlated with consumer spending, binary options investors consider a rise in the average cash earnings as a signal that the Japanese consumers will likely increase their spending. As consumer spending makes up a large portion of the Japanese GDP, it can predict the future strength of the Yen.
Last month, the Japanese average cash earnings decreased by -0.6% and the forecast for this month is currently set at a 0.5% increase.
Since forming a large bearish bar with a long tail on September 8, the USD/JPY has turned very bullish and the pair climbed by up around 480 pips over the last month. However, after reaching near the 112.90 level, it found a strong resistance last week. Although the USD/JPY penetrated above the 112.90 level, it has so far failed to close above it.
As the US ISM Manufacturing PMI reading is expected to come out at 57.9, but the Japanese average cash earnings figure is expected to grow by only 0.5%, we believe it would set a bearish fundamental outlook for the USD/JPY this week. Therefore, if the USD/JPY closes above the resistance near 112.90, it would likely attract additional bullish momentum in the market.
Hence, US binary options traders should look out for trading opportunities above this major resistance level around 112.90.