Strong ISM sends EURUSD sub 1.13 and USDJPY above 112

Summary:

ISM non-manufacturing PMI: 59.7 vs 57.4 exp
USD gains after solid data point
EURUSD at 1.13, USDJPY at 112

The US has rounded off a day of service sector data with a strong reading that has boosted the greenback to its highest levels of the day. After an early disappointment from China, the service figures on the whole have been pleasing, none have been more so than the ISM non-manufacturing PMI which rose to 59.7 for February. Not only is the reading the highest in 3 months, but it is also comfortably above the 57.4 expected and 56.7 seen last time out.

After two consecutive disappointments the ISM non-manufacturing bounced back in February and is now back not far from its highest level in several years. Source: Bloomberg

Not only was the headline reading strong, but the new orders figure was a standout. This metric rose to 65.2 from 57.7 prior in what is the highest release for this data point since 2005! Other subcomponents such as the employment (55.2 vs 57.8 exp) and prices paid (54.4 vs 59.4 prior) did disappoint which may be seen to take the shine off the overall index and new orders. On balance the initial reaction has been positive for the US dollar with EURUSD breaking below the 1.13 handle while the USDJPY has moved above 112.

The EURUSD has fallen to its lowest level in over a fortnight since the release with the pair breaking below the 23.6% fib at 1.1300 in doing so. Source: xStation

USDJPY has also taken out a big round number in moving above the 112 handle to trade at its 2019 highs. However, the region around 112.35 may still provide some resistance to a larger move higher. Source: xStation

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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