FxWirePro: USD/JPY holds marginal gains, upbeat prints of US ISM Manufacturing PMI, Fed talks underpin the US Dollar

Chart - Courtesy Trading View 

USD/JPY was trading 0.30% higher on the day at 136.53 at around 05:30 GMT, on track to test 200-DMA at 137.24.

US ISM Manufacturing PMI on Wednesday showed New Orders Index jumped to 47.0 from the expectations of 43.7 and the former release of 42.5.

Further, the Manufacturing Price Paid climbed to 51.3 vs. the consensus of 45.0 and prior 44.5, suggesting that Producer Price Index (PPI) might deliver a surprise upside ahead.

Data shows that the US inflation situation is getting complex and Federal Reserve (Fed)  is likely to strengthen its defense in the battle against persistent inflation.

Fed chair Jerome Powell has been reiterating that a consideration of a premature rate cut could have a devastating impact on the inflation situation.

Market mood is displaying caution as investors worry that more rates from the Federal Reserve will push the United States economy into a recession. 

On the other side, back-to-back dovish commentaries from Bank of Japan (BoJ) policymakers are impacting the Japanese Yen.

Looking ahead, focus is on  Friday’s key US ISM Services PMI for February for further impetus. 

Major Support Levels: 

S1: 136.27 (5-DMA)

S2: 134.97 (110-EMA)

Major Resistance Levels: 

R1: 137.24 (200-DMA)

R2: 137.58 (Upper BB)

Summary: USD/JPY pivotal at 200-DMA resistance. Technical indicators show bullish momentum. Watch out for decisive break above 200-DMA for fruther gains.