Dollar remains steady after ADP private employment report which shows 58k jobs were added to the US economy in Sep. The data is basically inline with expectation of 53k which improved from a downwardly revised 27k in Aug. In the Challenger report, job cut announcements edged down in Sep from 79k to 71k. Both data are supportive to a recovery in Friday's NFP. Markets' focus is turning to the ISM non-manufacturing index, in particular the employment component.
Released earlier UK Services PMI eased to from 57.6 to 56.7 in Sep, below expectation of 57.0 suggesting. The services sector weakened slightly but relative to the manufacturing sector, with PMI at 55.1, it's still strong. Eurozone Services PMI dropped to 54.2. Retail sales improved modestly in Eurozone, rising 0.1% mom, 1.0% yoy in Aug.
The Japanese yen weakens broadly since European session suggesting another leg up could be seen in yen crosses today. USD/JPY also set to take out recently established range and resume corrective rally from 111.59, towards 118 level.
Read full report (EUR/USD, GBP/USD, USD/CHF, USD/JPY, EUR/JPY) here.
Daily Pivots: (S1) 115.35; (P) 115.67; (R1) 116.07
USD/JPY strengthens today with a break above inner falling trend line as well ass 116.36 resistance. The whole corrective from that started from 111.59 could have resumed. At this point, intraday bias will stay on the upside as long as 115.54 support. Current rise is expected to extend towards 100% projection of 111.59 to 117.11 from 112.58 at 118.10. On the downside, however, below 115.54 will turn intraday bias back to the downside and indicate USD/JPY is possibly still bounded in choppy sideway consolidation. And still, below 112.58 support will be the first alert that consolidation has possibly completed and encourage a retest of 111.59 low.
In the bigger picture, as discussed before, daily MACD's stay above signal line suggests that the whole decline from 124.12 could have already completed at 111.59. Hence, further break of this low is needed to confirm that sharp fall from 124.13 has resumed. Otherwise, USD/JPY could still develop into lengthier consolidation.
Prior break of long term rising trend line (101.65, 108.99) indicates the the whole up trend from 101.65 could also have completed at 124.13 already, with bearish divergence condition in weekly MACD and RSI.. Break of 111.59 will indicate fall from 124.13 has resumed for support zone between 108.99 and 61.8% retracement of 101.65 to 124.13 at 110.23.