USD/JPY outlook: Falls further on weaker than expected NFP numbers

USD/JPY

USDJPY fell sharply (down 1% in immediate reaction to US jobs data) after US NFP dipped well below expectations in July (114K vs 176K f/c), while June’s figure was revised down to 179K from initial 206K.

Unemployment unexpectedly rose to 4.3% in July from 4.1% June / consensus, while average earnings rose by 0.2% last month vs 0.3% in June and identical forecast.

Weaker than expected labor data, with significant drop in Nonfarm payrolls, added to negative outlook, boosted the latest dovish signals from Fed and strongly boosted expectations for 50bp cut in September (against initial 25 bp) and lifted projections for cuts in 2024 to 110 bp.

The pair extended further below broken 150 mark and broke below pivotal Fibo support at 148.54 (61.8% of 140.25/161.95 to hit the lowest since mid-March (147.01) in post-NFP acceleration, with weekly close below 150 to confirm negative signal.

Bears eye immediate target at 146.48 (Mar 8/11 higher base) and may extend towards 145.37 (Fibo 76.4%), with consolidation likely to precede as daily studies are oversold.

Upticks should be ideally capped under 150 level (reverted to resistance), guarding 200DMA (151.65).

Res: 148.54; 150.00; 150.80; 151.65.
Sup: 147.01; 146.48; 145.89; 145.37.

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