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USD/JPY forex signal - Philly Fed manufacturing index - 15 Mar 2018

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The Philadelphia Fed's regional manufacturing index data will be released today at 12:30 GMT. Alongside the regional manufacturing data, the NY Fed's Empire State manufacturing index data will also be released. According to the economists polled, the Empire state manufacturing index is expected to rise to 15.2, accelerating from 13.1 that was registered in February.

The Philly fed manufacturing index is forecast to slip to 23.2 for March, down from February's print of 25.8. The rather mixed report is however expected to feed into the ISM's manufacturing report and the Markit's manufacturing PMI for March.

So far, the U.S. manufacturing sector has been in a strong growth momentum mode and this is expected to continue. Supported by the tax cuts and also the newly imposed tarrifs on steel and aluminum imports, the government policy changes are expected to be in favor of the manufacturing sector in the U.S.

Besides the regional manufacturing index reports, the import prices data for the month of February will also be released. Economists forecast that import prices rose 0.3%, which is somewhat slower pace compared to the 1.0% increase seen the month before.

Combined, the data is expected to bring some volatility to the U.S. dollar as a result especially as investors gauge the second tier information heading into next week's FOMC meeting.

Based on the above, the forex signal of the day is USDJPY. The currency pair has been seen consolidating near the lows for the past few days. This was mostly on account of a strong Japanese yen as investors speculate on a potential tightening signal from the Bank of Japan.

The weakness in the U.S. dollar also helped to alleviate the declines. Still, we expect to see a near term bounce to the upside. Therefore, we are looking to go long on USDJPY at 106.08, targeting 107.13 with stops at 105.75 as we expect to see price action bounce off the support level.

forex signal usdjpy 15 mar 2018

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion. All risks and coasts associated with online trading are your responsibility.