USD/JPY Forecast: Bearish ahead of US employment figures
|USD/JPY Current price: 108.61
- Japanese data missed the market’s expectations, triggering fresh concerns about the economy.
- Focus on US employment figures, market players anticipate dismal numbers.
- USD/JPY is technically bearish could break below the 108.00 level.
The Japanese yen is marginally higher against its American rival, with the pair trading around 108.60, although the action across the FX board is limited, ahead of the US Nonfarm Payrolls report. The greenback remains among the weakest, despite encouraging comments from US and Chinese representatives, reaffirming that trade talks continue to progress.
Japanese data released overnight missed the market’s expectations, as Overall Household Spending fell by 5.1% in October against the -3.0% expected by the market. The October preliminary Leading Economic Index came in at 91.8, missing the market’s expectations of 92 and below the previous 91.9.
Speculative interest is waiting for US November employment data. The country is expected to have added 180K new jobs, while the unemployment rate is foreseen steady at 3.6%. Wages’ growth is also seen within familiar levels, up by 0.3% MoM and by 3.0% when compared to a year earlier. Later in the day, the US will release the preliminary estimate of the Michigan Consumer Sentiment Index, seen at 96.5 from 96.8 in the previous month.
USD/JPY short-term technical outlook
The USD/JPY pair is technically bearish, according to the 4-hour chart, as it’s below a bearish 20 SMA, which extends its decline below the larger ones. The Momentum indicator heads marginally lower around its mid-line, while the RSI eases within negative levels, at around 39. Additional declines are likely on a break below 108.45 triggered by a dismal US employment report.
Support levels: 108.45 108.10 107.75
Resistance levels: 109.00 109.30 109.60
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