USD/JPY Forecast: Waiting for some action at the end of the week

Valeria Bednarik FXStreet

USD/JPY Current price: 106.18

The focus is on the US Nonfarm Payrolls report and the dollar’s response.
Equities and government bond yields are posting modest advances after Thursday’s chaos.
USD/JPY is technically neutral above the 106.00 figure, has room to test 107.10.

Market players are trying to shrug off Wall Street’s collapse, with all hopes on the upcoming Nonfarm Payrolls’ report. The USD/JPY pair is stable around 106.20, recovering some ground alongside equities and US Treasury yields. European indexes trade in the green, although gains remain modest. Government bond yields, in the meantime, also ticked modestly higher.

The US will publish its August employment figures and is expected to have recovered another 1.4 million jobs in August, after adding 1.76 million in July. The unemployment rate is expected to tick down to 9.8% from the latest 10.2%, while the participation rate is seen steady at 61.4%. Average Hourly Earnings, however, are expected to remain flat in the month and are foreseen at 4.5% when compared to a year earlier.

USD/JPY short-term technical outlook

The USD/JPY pair is technically neutral in the short-term, and according to the 4-hour chart. It’s barely holding above its moving averages, which remain confined to a tight range. Technical indicators, in the meantime, are flat just above their midlines. The upcoming direction will depend on the outcome of the US employment report, with an upbeat result probably boosting the pair towards the 107.00 price zone. Below 105.90, on the other hand, the pair could fall towards the 105.50 region.

Support levels: 105.90 105.50 105.10

Resistance levels: 106.35 106.70 107.10

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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