US ISM Manufacturing PMI Data Disappoints: USDJPY Under Pressure

The USDJPY is under pressure and is currently down by 25 pips after a disappointing US ISM Manufacturing PMI figure was released this afternoon by the Institute of Supply Management. The US ISM Manufacturing PMI figure came in at 47.8, which is worse than the figure of 50.4 that market analysts had predicted. It is also worse than the figure for last month (49.1) and therefore meets our trade deviation parameters.

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USDJPY Trade Ideas

The deviation between the forecast and previous number was 1.3. In my analysis piece, I had predicted that a figure which came in at 49.0 or less would lead to a drop in the USDJPY by about 30 pips in the first few minutes of the trade. This setup has been fulfilled.

However, there may be possible chances of re-entry if the price retraces upwards as institutional traders take profits.

There is a chance for further downside if USDJPY is able to break below the lower channel line at the challenge point of 107.99. If this occurs (especially if tomorrow’s ADP Employment Change and ISM Non-Manufacturing Data are negative for the US Dollar), then the initial target would most likely be the 38.2% Fibonacci level at 107.47. Below this level, further support lies at 107.07.

On the flip side, further upside on the USDJPY may be possible if the price candles break above the 50% Fibonacci level, where pair found resistance today. This area corresponds to price highs of September 18/19. Such a break would invalidate the news-driven bearish bias.

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USDJPY Chart After Release of US ISM Manufacturing PMI

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