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USD/JPY Approaches Key Support Ahead of US NFP

Aayush Jindal

Aayush Jindal

Key Highlights

  • USD/JPY started a fresh decline from the 125.00 resistance zone.
  • It traded below a major bullish trend line with support near 122.30 on the 4-hours chart.
  • Crude oil price is struggling to gain pace above $108 and $110.
  • The US nonfarm payrolls could increase 490K in March 2022, down from 678K.

 

USD/JPY Technical Analysis

The US Dollar started a fresh decline from the 125.09 high against the Japanese Yen. USD/JPY traded below the 123.50 support to enter a short-term bearish zone.

Looking at the 4-hours chart, the pair declined below the 1.2250 support zone. There was a move below the 23.6% Fib retracement level of the upward move from the 114.64 swing low to 125.09 high.

Besides, there was a break below a major bullish trend line with support near 122.30 on the same chart. However, the pair is still well above the 200 simple moving average (green, 4-hours) and the 100 simple moving average (red, 4-hours).

An initial support is near the 121.00 level. The main support is near the 120.00 level. It is near the 50% Fib retracement level of the upward move from the 114.64 swing low to 125.09 high.

A downside break below the 120.00 level might call for a sharp decline. The next major support sits near the 118.80 level, below which the pair could revisit 117.50.

On the upside, an immediate resistance is near the 122.20 level. The main resistance sits near the 122.60. A clear move above the 122.60 zone could set the pace for a move towards 123.50.

Looking at EUR/USD, the pair spiked above the 1.1120 resistance zone, but it struggled to clear the 1.1150 level. Besides, GBP/USD is still trading well below the 1.3200 resistance.

Economic Releases

  • Germany’s Manufacturing PMI for March 2022 - Forecast 57.6, versus 57.6 previous.
  • Euro Zone Manufacturing PMI March 2022 – Forecast 57.0, versus 57.0 previous.
  • UK Manufacturing PMI for March 2022 – Forecast 55.5, versus 55.5 previous.
  • US Manufacturing PMI for March 2022 – Forecast 58.5, versus 58.5 previous.
  • US nonfarm payrolls for March 2022 – Forecast 490K, versus 678K previous.
  • US Unemployment Rate for March 2022 - Forecast 3.7%, versus 3.8% previous.