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In the U.S., weak activity in the manufacturing sector is raising concerns. ISM manufacturing PMI slipped to 41.9 in August, down from 51.2 in July. It marked the first reading in contraction territory (below the 50-level) since August 2016. Unemployment data was a mix. Nonfarm payrolls slowed to 130 thousand in August, down from 164 thousand a month earlier. However, wage growth rose to 0.4% in August, its strongest gain of the year. The unemployment rate remained unchanged at 3.7%. In Japan, household spending slowed to 0.8% in July, down from 2.8% a month earlier.
Updates:
We start with 109.73, which has held in resistance since the end of May. 109.35 is close by.
108.70 follows.
108.10 was a swing low in late May.
107.30 has held in resistance since the first week in August.
106.61(mentioned last week) remains relevant. It is providing immediate support.
105.55 is next.
104.65 has held firm since the first week of January.
The round number of 104 was a key line in May 2008.
103.53 was an important resistance line in August 2016. It is the final support line for now.
I am neutral on USD/JPY
Investor risk appetite has solidified of late, which has hurt the safe-haven yen. Will the yen’s downward trend continue? The trade war between the U.S. and China remains full-blown, but the sides are scheduled to hold talks next month, and if there are signs that trade tensions are easing, the yen could lose ground.
Further reading:
Safe trading!
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