Business activity in the US non-manufacturing sector fell last month but remained in the expansion territory for the 89th straight month. The Institute for Supply Management reported on Monday that its PMI for the US services sector dropped to 56.9 in May from the prior month's 57.5, whereas analysts anticipated a slighter decrease to 57.1 points during the reported month. The ISM said that 17 non-manufacturing industries reported growth last month. The New Orders Index fell to 57,7 from April's 63.2, whereas the Prices Index declined to 49.2 in May from 57.6, marking the first drop in 13 months.
Meanwhile, the Employment Index surged to 57.8 from the preceding month's 51.4, surprising markets after the weak NFP Report released last week. Analysts said that growth in the non-manufacturing sector remained solid despite May's drop, as the growth rate and the Employment Index remained high. Moreover, 15 industries reported employment growth, while just one posted an employment fall. The following employment figures suggested that weak slow job creation in the private sector would be temporary.
No important US data, Japanese GDP eyed
USD/JPY struggles to hold above 109.00
The USD/JPY pair behaved in accordance with expectations yesterday, being that the monthly S1 at 109.22 was the level that managed to prevent the pair from edging lower. Although the monthly S1 managed to limit the losses on Tuesday, risks remain skewed to the downside, meaning that the given demand level could fail today. A breach of this support would open the door for a drop beyond 109.00, with the second closest strong support being only under 108.00. Technical studies do suggest the bearish momentum is to prevail today, but given the latest USD movements, a positive development would not be a surprise. The recovery, however, would just be a bullish correction from the recent declines and could well take place if the given trend-lines prove to be viable.Hourly chart
Traders' sentiment remains neutral, with 52% of all open positions are long and the other 48% are short. Meanwhile, there are 54% of all pending orders set to purchase the Greenback.
At the moment, 61% of OANDA clients are long the US Dollar against the Yen, while the remaining 39% are short. In addition, Saxo Bank clients' sentiment slightly improved over the weekend, as 62% of their open positions are now long.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar