US economic data has been soft since December and all eyes will be on today’s ISM Non-Manufacturing Index. Last Friday, the ISM Manufacturing Index came in well below expectations, showing the recession in the manufacturing sector is worse than priced in. Economists expect a rebound in the ISM Non-Manufacturing Index while factory orders are anticipated to post a contraction. How will this influence price action in the USDJPY? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.

Final Japanese services and composite PMI data were revised lower, showing a contraction in both components. This resulted in a minor sell-off in the Japanese Yen, pushing the USDJPY to the upper band of its horizontal resistance area. Safe-haven demand also eased as traders rethink their initial reaction to the spike in tension between the US and Iran. How will today’s US economic data influence this currency pair? Today’s fundamental analysis will take a look at the upside potential as well as the downside risk in this currency pair.