USD/JPY Forecast: Ignoring the upbeat market mood ahead of the NFP report
USD/JPY Current price: 107.44
- All eyes on US employment data as some states tighten lockdown measures.
- The market sentiment is overall positive ahead of the event.
- USDJPY pair is technically neutral, needs to recover beyond 107.95.
The USD/JPY pair trades in the 107.40 price zone, confined to a tight range ever since the day started and ahead of the US Nonfarm Payrolls report. Market players are optimistic, dumping the American currency, despite the pandemic-crisis is far from over. The number of new contagions continues to increase daily basis, and the US is the country that reports most daily cases. Headlines related to progress in vaccines mixed with others reporting stricter lockdowns in some US states and European cities.
The Nonfarm Payrolls report is expected to show that the country recovered 3 million jobs in the month, while the unemployment rate is seen contracting from 13.3% to 12.3%. Average Hourly Earnings are still seen well above average, although returning to pre-pandemic levels. The yearly figure is seen at 5.3% from 6.7% in the previous month. Monthly Average Hourly Earnings are foreseen at -0.7% from -1.0%.
USD/JPY short-term technical outlook
The USD/JPY pair is trading just below the 38.2% retracement of its June monthly slide at 107.50, neutral in the short-term. The 4-hour chart shows that the 20 and 200 SMA converge a few pips above the mentioned Fibonacci level, while the 100 SMA hovers a few pips below the current level. Technical indicators, in the meantime, are directionless within negative levels. The main support now is 106.95, the 23.6% retracement of the mentioned decline, while the most relevant resistance is 107.95.
Support levels: 106.95 106.60 106.20
Resistance levels: 107.50 107.95 108.30
Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
