Welcome to Extreme Investor Network, where we provide expert analysis and insights into the stock market, trading, and all things Wall Street. Today, we are diving into the latest predictions surrounding the ISM Manufacturing PMI and its potential impact on the market.
Economists are forecasting an increase in the ISM Manufacturing PMI from 46.8 in July to 47.8 in August. While this sector only accounts for less than 30% of the US economy, better-than-expected numbers could support expectations of a soft landing for the US economy. However, investors should not overlook the subcomponents of the PMI, especially job creation trends, given the current scrutiny on the US labor market.
Positive numbers may lead to a reduction in investor bets on a 50-basis point September Fed rate cut. This could potentially result in a USD/JPY move towards 147.500. Conversely, weaker figures could spark speculation about a 50-basis point rate cut, potentially sending the USD/JPY down towards 145.
Expert Shane Oliver, Head of Investment Strategy and Chief Economist at AMP, weighed in on the Fed rate path, stating that the recent inflation numbers could pave the way for a 25-basis point Fed rate cut in September.
In the short term, the USD/JPY trends will be influenced by various factors including the services sector PMI, wage growth, and household spending data from Japan. Positive data from Japan may strengthen expectations of a potential BoJ rate hike and increase demand for the Yen. However, US services sector PMI and labor market data will also play a crucial role in shaping the USD/JPY direction.
As investors, it is important to stay alert and closely monitor real-time data, central bank statements, and expert opinions to adjust your trading strategies accordingly. Keep up with our latest news and analysis to navigate the volatility of the USD/JPY market effectively.
Looking at the USD/JPY price action, the currency pair is currently below the 50-day and 200-day EMAs, indicating a bearish trend. A potential rise to 147 could see a challenge at the 147.500 level, while a breakout could signal a move towards the 148.529 resistance level. On the flip side, a break below the 145.891 support level could lead to further downside towards 144.500 and beyond.
With the 14-day RSI at 45.41, there is a possibility of the USD/JPY breaking below the 143.495 support level, potentially entering oversold territory. Keep an eye on the ISM Manufacturing PMI data and central bank updates to navigate the USD/JPY price movements effectively.
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