USD/JPY slides below 111 as USD weakens on disappointing NFP figures
|- Nonfarm payrolls increased by 20K to miss market expectation by a wide margin.
- US Dollar Index drops to daily lows below 97.40.
- Wall Street looks to open sharply lower.
The USD/JPY pair lost nearly 40 pips in a matter of minutes after the market reaction to the disappointing nonfarm payrolls data from the United States triggered a USD sell-off. As of writing, the pair was trading at 110.90, losing 0.6% on a daily basis.
According to the U.S. Bureau of Labor Statistics, the total nonfarm payroll employment in the U.S. increased by just 20,000 in February and fell short of the market expectation of 180,000. Other details of the report showed that the unemployment rate ticked down to 3.8% and the wage inflation, as measured by the average hourly earnings, rose 0.4% on a monthly basis in February to beat the analysts' estimate of 0.3%.
The US Dollar Index, which advanced to its highest level since mid-November at 97.71 on Thursday, fell sharply and was last down 0.25% on a daily basis at 97.35. Despite today's drop, however, the index still remains on track to add nearly 1% on a weekly basis.
Meanwhile, the S&P 500 Futures is losing 0.9% minutes ahead of Wall Street opening bell and suggests that stocks are likely to suffer heavy losses on Friday, which could help the JPY continue to gather strength as a safe-haven.
Technical levels to consider
The pair could face the initial support at 110.65 (Feb. 28 low) ahead of 110.35 (Feb. 27 low) and 110 (psychological level). On the upside, resistances are located at 111 (100-DMA/psychological level), 111.50 (200-DMA) and 112.15 (Mar. 5 high).
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