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  • Risk-on mood doesn’t allow JPY to stay strong against its peers.
  • US Dollar Index dips  below 97 on mixed PMI data.
  • Coming up: FOMC member Kaplan speech.

After slumping to a daily low of 113.35, the USD/JPY pair started to retrace its drop as the JPY struggled to stay resilient against the dollar with Wall Street rally pointing to a risk-on market environment. As of writing, the pair was virtually unchanged on a daily basis at 113.60.

On the back of positive developments surrounding the U.S. – China trade-conflict, major European equity indexes recorded decisive gains on Monday and allowed Wall Street to start the week on a positive note to reflect an improved market sentiment. At the moment, all three major indexes in the U.S. are adding more than 1% with the Nasdaq Composite leading the rally with an impressive  1.8% gain.

On the other hand, despite the disappointing Markit Manufacturing PMI reading, the US Dollar Index, which recovered above the 97 mark following a modest drop in the first half of the day, is limiting its losses supported by the upbeat ISM Manufacturing PMI report. The DXY was last seen at 96.95, where it was down 0.25% on the day.

  • US: Markit Manufacturing PMI falls to 55.3 vs 55.4 expected.
  • US: ISM Manufacturing PMI rises to 59.3 vs 57.5 expected.

Later in the session, Dallas Fed President Kaplan will be delivering a speech.  

Technical levels to consider

The pair could face the first support at 113.35/30 (daily low/20-DMA) ahead of 112.90 (50-DMA) and 112.35 (100-DMA). On the upside, resistances are located at 113.80 (daily high), 114.20 (Nov. 12 high) and 115 (psychological level).