The USD Outpaces The Japanese YEN Ahead of The US NFP06 March, 2015 by Aayush Jindal in Market Analysis
- US dollar continued to surge higher against most major currencies, including the Japanese yen.
- EURUSD made a new yearly low recently, which signifies strength of the US dollar.
- USDJPY climbed above the 120.00 level and gained momentum.
- US Nonfarm Payrolls and unemployment rate will be released today by the US Department of Labor.
- Japanese Leading Economic Index released by the Cabinet Office came in at 105.1 in January 2015, compared to the last revised reading of 105.3.
Japanese Leading Economic Index
Earlier during the Asian session, the Japanese Leading Economic Index was released by the Cabinet Office. The outcome was a touch disappointing, as the Leading Economic Index came in at 105.1 in January 2015. This was lower compared to the last reading, which was also revised down from 105.6 to 105.3.
There was one more release lined up i.e. the coincident index representing summary statistic that tracks the current state of the Japanese economy. The outcome was better, as the index managed to post a higher reading of 113 in January 2015, compared to the last reading, which was revised down from 110.7 to 110.6. There was some reaction noted in the yen pairs, as the USDJPY pair traded a touch lower. However, the downside was limited as the US dollar buyers continued to stay on the top.
The USDJPY pair after trading above the 120.00 level tested 120.40 where sellers held the upside. There is a major bullish trend line on the hourly chart, which is likely to act as a barrier for sellers in the near term. The pair is currently testing the 120.00 support area, which is coinciding with the 23.6% fib retracement level of the last leg from the 118.66 low to 120.41 high. Let us see whether the pair continues to move lower or head back higher in the short term.
On the upside, initial resistance is around the 120.40 level where we might notice a reaction. A break above the same might call for a move towards the 120.80 level.
Later during the NY session, the Nonfarm Payrolls and unemployment rate will be released today by the US Department of Labor. The market is expecting a nice gain of 240K in the US NFP. Let us see how the outcome unfolds and affects the US dollar moving ahead.