Dollar rallies against the Japanese yen

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Dollar Surges Against Yen Despite ISM Manufacturing Miss
Dollar rallies against the Japanese yen in early US session even though ISM manufacturing index missed expectations. Though, the greenback is steady elsewhere as the movement is mainly triggered by yen's own weakness. US equities open higher with S&P 500 now heading back to its historical high. The ISM manufacturing index rose to 53.7 in March but was below consensus of 54.0. Improvements were seen in production and new orders. However, it should be noted that the employment component dropped to 51.1, down from 52.3, which is a negative factor for Friday's NFP. Also released in US session, US construction spending rose 0.1% mom in February. Canadian IPPI rose 1.0% mom in February while RMPI rose 5.7% mom.
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Featured Technical Report
USD/JPY Mid-Day Outlook
Daily Pivots: (S1) 102.86; (P) 103.15; (R1) 103.50; More...
The rebound from 101.20 is still in progress and could extend higher. As note before, price actions from 105.41 are viewed as a correction pattern, with those from 100.75 as the second leg. Current development argues that such second leg isn't completed yet. Further rise could be seen above 103.75. But in that case, we'd expect strong resistance below 105.41 to limit upside and start the third leg. Meanwhile, below 102.68 minor support will turn bias back to the downside for 101.20 and then 100.75 low.

Economic Indicators Update


GMT
Ccy
Events
Actual
Consensus
Previous
Revised
23:50
JPY
Tankan Large Manufacturers Index Q1
17
19
16

23:50
JPY
Tankan Non-Manufacturing Index Q1
24
25
20

01:00
CNY
Manufacturing PMI Mar
50.3
50.1
50.2

01:45
CNY
HSBC/Manufacturing PMI Mar F
48
48.5
48.5

03:30
AUD
RBA Rate Decision
2.50%
2.50%
2.50%

07:30
CHF
SVME-PMI Mar
54.4
56.7
57.6

07:45
EUR
Italian Manufacturing PMI Mar
52.4
52.2
52.3

07:55
EUR
German Unemployment Change Mar
-12K
-10K
-14K
-15K
07:55
EUR
German Unemployment Rate Mar
6.70%
6.80%
6.80%
6.70%
08:00
EUR
Eurozone Manufacturing PMI Mar F
53
53
53

08:00
EUR
Italian Unemployment Rate Feb P
13.00%
12.90%
12.90%

08:30
GBP
PMI Manufacturing Mar
55.3
56.5
56.9
56.2
09:00
EUR
Eurozone Unemployment Rate Feb
11.90%
12.00%
12.00%
11.90%
12:30
CAD
Industrial Product Price M/M Feb
1.00%
0.70%
1.40%

12:30
CAD
Raw Materials Price Index M/M Feb
5.70%
2.30%
2.60%
2.80%
14:00
USD
ISM Manufacturing Mar
53.7
54
53.2

14:00
USD
ISM Prices Paid Mar
59
59
60

14:00
USD
Construction Spending M/M Feb
0.10%
0.10%
0.10%

   
Orders and Options Watch
US Session: Orders and Options Watch
EUR: The single currency continued to move higher and offers at 1.3810 were filled but sell orders are still noted from 1.3820 up to 1.3850 (stops above latter level), mixtures of offers and stops are located at 1.3870 and 1.3900. On the downside, bids are raised to 1.3785, 1.3750-65 and in good size at 1.3725-35, more buy orders are reported at 1.3695-10, buying interest is tipped at 1.3660-70 with bigger stops placed below 1.3650.
Forex Trade Ideas
Trade Idea Update: USD/JPY - Buy at 102.70
Although the greenback has rebounded again, break of yesterday's high of 103.44 is needed to signal recent rise from 101.21 has resumed and extend gain towards previous resistance at 103.76, having said that, as broad outlook remains consolidative, upside should be limited and price should falter below 104.00. If said resistance continues to hold, then further consolidation is in store and another corrective fall to 102.80 cannot be ruled out
Trade Idea Update: GBP/USD - Buy at 1.6600
As the British pound has retreated after holding below yesterday's high of 1.6684, suggesting minor consolidation would bee seen but downside should be limited to 1.6597-00 and bring another rise, above said resistance would extend the rise from 1.6460 to 1.6700 and possibly test of resistance at 1.6718, however, loss of upward momentum should prevent sharp move beyond latter level

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