USD/JPY Remains Supported Ahead of US NFP

Key Highlights

  • The US Dollar failed to move above the 112.00-112.10 resistance and declined against the Japanese Yen.
  • There is a major bullish trend line formed with support at 111.00 on the 4-hours chart of USD/JPY.
  • The US Initial Jobless Claims for the week ending July 28, 2018 increased from 217K to 218K.
  • Today, the US NFP report will be released for July 2018, which is forecasted to register 190K.

USDJPY Technical Analysis

The US Dollar jumped higher recently from the 111.00 support against the Japanese Yen. However, the USD/JPY pair faced a solid barrier near the 112.00 zone, resulting in a fresh downside move.

USDJPY Technical Analysis US Dollar Japanese Yen

Looking at the 4-hours chart, the pair failed to hold gains above the 111.50 level and the 100 simple moving average (red, 4-hours). It was rejected from the 61.8% Fibonacci retracement level of the last decline from the 113.20 swing high to 110.60 low.

The pair is currently moving lower, but it remains well supported above the 111.00 level. There is also a major bullish trend line formed with support at 111.00 on the same chart.

Above the trend line, the 200 simple moving average (green, 4-hours) is positioned at 111.10. Therefore, if the pair continues to move down, it is likely to find support near 111.00. Below this, USD/JPY could move into a bearish zone towards 110.60.

On the upside, the 111.75 level and the 100 SMA are important hurdles followed by 112.00. A break and close above 112.00 may well open the doors for a push towards 112.80.

Recently in the US, the Initial Jobless Claims for the week ending July 28, 2018 was released by the US Department of Labor. The market was looking for a rise in claims from 217K to 220K.

However, the rise in claims was 1K to 218K, and the advanced seasonally adjusted insured unemployment rate remained at 1.2% for the week ending July 21, 2018. The report added that:

The 4-week moving average was 214,500, a decrease of 3,500 from the previous week’s unrevised average of 218,000.

Overall, the US Dollar remains supported versus the Euro, British Pound and Japanese Yen ahead of today’s NFP release.

Economic Releases to Watch Today

  • Germany’s Services PMI for July 2018 – Forecast 54.4, versus 54.4 previous.
  • Euro Zone Services PMI for July 2018 – Forecast 54.4, versus 54.4 previous.
  • UK Services PMI for July 2018 – Forecast 54.7, versus 55.1 previous.
  • US Services PMI for July 2018 – Forecast 56.2, versus 56.2 previous.
  • US nonfarm payrolls July 2018 – Forecast 190K, versus 213K previous.
  • US Unemployment Rate July 2018 – Forecast 3.9%, versus 4.0% previous.


Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

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