- US dollar buoyed across the board by upbeat US data and FOMC minutes overnight.
- U.S. Treasury yields recovered lost ground earlier on the day, helping further upside in the pair to extend its daily gains.
- U.S. ISM Manufacturing Index came in at 59.7 in December, surpassing expectations of 58.1.
- Data showed manufacturing sector is in great shape and will make a major positive contribution to economic growth this year.
- Fed minutes reinforce view for three hikes in 2018, has an improved outlook for output and little change in the inflation outlook.
- The pair finds stiff resistance at 20-DMA at 112.92. We see further bullishness only on break above.
- Technical indicators on daily charts are neutral, slightly tilted towards the downside.
Support levels - 112.02 (100-DMA), 111.90 (38.2% Fib retrace of 107.318 to 114.737), 111.65 (200-DMA)
Resistance levels - 112.53 (5-DMA), 112.90 (20-DMA), 113.63 (Dec 21 high)
Recommendation: Watch out for break at 20 or 100-DMA for further direction.
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -37.2316 (Neutral), while Hourly JPY Spot Index was at -72.9097 (Neutral) at 0520 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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