USD/JPY" US Dollar finds support at 109.15 ahead of ISM services PMI

• The USD/JPY is finding support at the 109.15 level.
• The US ISM non-manufacturing PMI is scheduled for 14:00 GMT this Thursday.
• The US Non-Farm Payroll on Friday is the next major market mover in line.

The USD/JPY is trading at around 109.35 down 0.45% as indices in Wall Street are trading lower and the US dollar is on the backfoot with the US Federal Reserve leaving rates on hold while indicating that the recent pickup in inflation justifies its gradual monetary policy normalization path.

The USD/JPY fell more than 80 pips off the highs made on Wednesday at 110.05 as market participants are starting to take some profits on their long USD bets after the FOMC statement on Wednesday. As the Japanese yen is a safe-haven currency, investors are buying the Asian currency as stock market indices in the US are falling. The FOMC statement said that the policymakers saw “inflation on a 12-month basis” reach the 2% target. The Fed is communicating that the policy normalization is well in place and that higher interest rates are coming as inflation is approaching the target. The next rate hike is expected in June. Higer rates see investors dump riskier assets like stocks and turn to cash.

The next major moving event on the calendar will be the non-farm payroll and the wage growth data which are both scheduled for Friday at 12:30 GMT. 

In the very near future this Thursday in the North American session, the US ISM non-manufacturing PMI (Purchasing Managers Index) is forecast to decelerate to 58.1 in April. The data is scheduled for 14:00 GMT. 

Earlier in the North American session, the US trade balance came in at minus $49.0 Billion against $50.0 billion expected in March while the US initial jobless claims, in the week ending April 27, came in above expectation at 211K versus 225K forecast by analysts.

USD/JPY 4-hour chart

The trend is bullish and immediate support is seen at 109.15 low of the day and at 108.54 swing low. Looking up, resistance is priced in at the 109.55 swing high and at the 110.05 cyclical high made this Wednesday.