USD/JPY Current price: 108.71

  • Japan’s Jibun Bank Services PMI returned to expansion territory in November.
  • US ADP employment survey and the ISM Non-Manufacturing PMI coming next.
  • USD/JPY would need to recover beyond 109.30 to change its negative stance.

Trade-related headlines continue to dominate the market’s mood and to determine the dollar’s direction. The American currency remained under pressure through the first session of the day, although it seems now to be finding some demand, as news agencies reported that the US and China are moving closer to agreeing on the amount of tariffs that would be rolled back in a phase-one trade deal. The USD/JPY pair bottomed at 108.42, now trading some 30 pips above such a low, maintaining its bearish stance despite correcting higher.

Japan released the Jibun Bank Services PMI for November, which improved by less than anticipated up to 50.3 from 49.7, anyway back in expansion territory. The US will release the ADP employment survey for November, foreseen at 140K, and the ISM Non-Manufacturing PMI for the same month, expected at 54.5 against the previous 54.7.

USD/JPY short-term technical outlook

From a technical point of view, the USD/JPY pair is at risk of falling further, with the latest advance seen as a due correction. In the 4-hour chart, the pair is developing below all of its moving averages, with the 20 SMA accelerating its slump, as technical indicators remain directionless well into negative ground, after barely correcting extreme oversold readings. The recovery could continue should the pair accelerate through 108.80, the immediate resistance, but would need to extend gains beyond 109.30 to lose the bearish stance, quite unlikely at the time being.

Support levels: 108.40 108.10 107.75

Resistance levels: 108.80 109.30 109.60

View Live Chart for the USD/JPY

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