USD/JPY Forecast: Pressure mounts ahead of US employment data

Valeria Bednarik FXStreet

USD/JPY Current price: 105.48

The American currency remains the weakest amid turmoil in the US.
US employment data hint a terrible Nonfarm Payroll report for July.
USD/JPY bearish potential to accelerate on a break below 105.30, the weekly low.

The USD/JPY pair is trading uneventfully around 105.50, with dollar’s weakness still being the main theme across the board, amid a combination of dismal data and lack of progress in the next coronavirus aid package. The market’s attention is now centred in US employment data, ahead of the Nonfarm Payroll report to be out on Friday. So far, employment-related data released these days hints a terrible number for July. Falling equities and Treasury yields flirting with multi-month lows skew the risk to the downside.

Japan didn’t publish relevant macroeconomic data, and as said, the focus is now in upcoming US figures. The country will publish the July Challenger Job Cuts, previously at 170.219K and Initial Jobless Claims for the week ended July 31, foreseen at 1.41M from 1.43M in the previous week.

USD/JPY short-term technical outlook

The USD/JPY pair is bearish according to technical readings in the 4-hour chart, as the 20 SMA has turned south, capping the upside around 105.76. Technical indicators, in the meantime, turned lower within negative levels. The pair needs to break below 105.31, the weekly low, to confirm a new leg lower which can extend towards the 104.40 price zone.

Support levels: 105.30 104.90 104.40

Resistance levels: 105.75 106.10 106.50

View Live Chart for the USD/JPY

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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.

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