USDJPY Technical Analysis – The NFP report keeps the market guessing
. Fundamental Overview . The USDJPY pair eventually dropped back to the August low as a series of soft US data pushed Treasury yields lower giving the JPY a boost.
FundamentalOverview
The USDJPY pair eventually droppedback to the August low as a series of soft US data pushed Treasury yields lowergiving the JPY a boost.
The NFPreport on Friday wasn’t bad, on the contrary, the data under the hood wasbetter than the prior month. Nevertheless, the trend in the labour marketcontinues to remain skewed to the downside.
The probabilities for theFed to cut by 50 bps at the upcoming meeting dropped to 27% following the NFPreport with a total of 110 bps of easing expected by year-end. For the BoJ, themarket sees a 99% probability of no change at the upcoming meeting and a totalof 7 bps of tightening by year-end.
USDJPYTechnical Analysis – Daily Timeframe
On the daily chart, we cansee that USDJPY eventually dropped back to the August low around the 141.70level. We are now very close to the key 140.20 level. If the price gets there,we can expect the buyers to step in with a defined risk below the level toposition for a rally into the 150.00 handle. The sellers, on the other hand,will want to see the price breaking lower to increase the bearish bets into newlows.
USDJPY TechnicalAnalysis – 4 hour Timeframe
On the 4 hour chart, we cansee that the price action has been kind of rangebound between the 143.50 and141.70 levels. If the price were to break higher, we can expect the buyers topile in and position for a rally into the trendlinearound the 146.00 handle. Conversely, if we were to get a break lower, thesellers will increase the bearish bets into the 140.20 level targeting a breakbelow it.
USDJPY TechnicalAnalysis – 1 hour Timeframe
On the 1 hour chart, we cansee more clearly the choppy price action of the last few days. The NFP reportwas supposed to trigger a bigger reaction, but given the mixed data, the marketgot stuck in a consolidation. The red lines define the average daily range for today.
UpcomingCatalysts
Tomorrow we have the US Small Business Optimism Index. On Wednesday, we get theUS CPI report. On Thursday, we have the latest US Jobless Claims figures andthe US PPI data. On Friday, we conclude the week with the University ofMichigan Consumer Sentiment report.
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