USD/JPY Downsides Remain Supported Ahead of NFP04 May, 2018 by Aayush Jindal in Market Analysis
- The US Dollar traded as high as 110.02 before starting a downside correction against the Japanese Yen.
- There are two bullish trend lines forming with support at 109.00 and 108.50 on the 4-hours chart of USD/JPY.
- The US Initial Jobless Claims for the week ending April 28, 2018 increased from 209K to 211K.
- Today, the US NFP figure for April 2018 will be released, which is forecasted to post 192K.
USDJPY Technical Analysis
The US Dollar made good gains recently and traded above the 109.00 level against the Japanese Yen. The USD/JPY pair traded as high as 110.02 before starting a downside correction.
Looking at the chart, it seems like a short-term top is formed around the 110.00 level. The pair is correcting lower and it traded below the 23.6% Fib retracement level of the last wave from the 106.89 low to 110.02 low.
However, there are many supports on the downside above the 108.50 level. There are also two bullish trend lines forming with support at 109.00 and 108.50 on the 4-hours chart of USD/JPY.
Moreover, the 50% Fib retracement level of the last wave from the 106.89 low to 110.02 high is at 108.45. Therefore, any further declines are likely to find support at 109.00 or 108.50. On the upside, the pair has to move above 110.00 to extend gains in the near term.
Recently, the US Initial Jobless Claims report for the week ending April 28, 2018 was released by the US Department of Labor. The market was looking for a rise from the last reading of 209K to 225K.
The actual result was better as there was a rise from 209K to 211K. The report added:
The 4-week moving average was 221,500, a decrease of 7,750 from the previous week’s unrevised average of 229,250. This is the lowest level for this average since March 3, 1973 when it was 221,250.
Overall, the USD/JPY pair may correct or consolidate in the short term, but downsides remain supported above 108.50.
Economic Releases to Watch Today
- Germany’s Services PMI for April 2018 – Forecast 54.1, versus 54.1 previous.
- Euro Zone Services PMI for April 2018 – Forecast 55.0, versus 55.0 previous.
- US nonfarm payrolls April 2018 – Forecast 192K, versus 103K previous.
- US Unemployment Rate April 2018 – Forecast 4.0%, versus 4.1% previous.