A separate report showed, activity in the US services sector rose more than expected in November, though employment component dropped. According to the Institute of Supply Management, services index soared to 59.3 last month, slightly below the post-recession peak of 59.6 reached in August. In October the reading came in at 57.1. Two out of the ten sub-index, including employment and imports, declined from October, but all remained above the 50 level. In contrast, Markit's report showed growth in the US services sector fell to the lowest since April, with services PMI dropping to 56.2.
Japan's manufacturing sector continued to expand, albeit at a slower pace, pointing to a modest recovery after the nation's economy unexpectedly fell into recession. The final Markit/JMMA Manufacturing PMI came in at 52.0 in November, compared with a preliminary reading of 52.1 and down from a final 52.4 last month. Nevertheless, the indicator remained above the 50-mark threshold, which indicates expansion in the sector.
US unemployment claims awaited
Today is not that different compared to yesterday in terms of data released, since we continue to gauge the US labor market with a release of US unemployment claims on the weekly basis. Analysts expect that the number of people who filed for unemployment insurance for the first time has decreased during the past week.USD/JPY continues to trade around this year's highs
At the first half of the year USD/JPY was trading almost completely flat, as it traded around the 102 level. However, at the second part of August the Greenback started to outperform the Japanese peer rather heavily. Currently, the pair has reached the 118/119 mark and for the time being it is supported by the support line and weekly PP around the 118 mark, if this level holds then we might see the pair climbing even higher. Nonetheless, in case these levels do not hold the selling pressure then the pair is likely to slide towards the monthly PP at 116.75.Daily chart
The US Dollar has strengthened its positions above the 119 level and is nearing the psychological level at 120. Meanwhile, also the weekly R2 at 119.77 has been broken. Nevertheless, according to the technical indicators the pair is likely to face a period of consolidation, since a distinct majority of them are pointing sideways. We expect the pair to continuously challenge the 120 level and to build to its bullish momentum.
Hourly chart