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USD/JPY Could Revisit 130.00, US NFP Next

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Aayush Jindal

Key Highlights

  • USD/JPY started a fresh increase above the 128.20 resistance.
  • It broke a major bearish trend line at 127.35 on the 4-hours chart.
  • The US ADP Employment changed 128K in May 2022, down from 202K (revised down from 247K).
  • The US nonfarm payrolls could increase 325K in May 2022, down from 428K.

USD/JPY Technical Analysis

The US Dollar formed a base above the 126.35 against the Japanese Yen. USD/JPY started a fresh increase after it broke the 127.20 resistance.

Looking at the 4-hours chart, the pair cleared the 128.20 resistance, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

There was a clear move above the 50% Fib retracement level of the downward move from the 131.34 swing high to 126.35 low. The upward move gained pace above the 129.00 resistance zone.

Finally, it tested the 76.4% Fib retracement level of the downward move from the 131.34 swing high to 126.35 low. If the bulls remain in action, it could rise further towards the 130.00 resistance. The next major barrier could be near the 131.20 level.

If there is a downside correction, the pair could decline towards the 128.85 support. The next major support sits near the 128.40 level and the 100 simple moving average (red, 4-hours). Any more losses might send USD/JPY towards the 127.20 support.

Fundamentally, the US ADP Employment Change for May 2022 was released yesterday by the Automatic Data Processing, Inc. The market was looking for an increase of 300K in May 2022.

The actual result was disappointing, as the US ADP Employment increased 128K. Besides, the last reading was revised down from 247K to 202K.

Looking at EUR/USD, the pair found support near the 1.0620 level and recovered. Similarly, GBP/USD and AUD/USD remained in a positive zone.

Economic Releases

  • US nonfarm payrolls for May 2022 – Forecast 325K, versus 428K previous.
  • US Unemployment Rate for May 2022 - Forecast 3.5%, versus 3.6% previous.
  • US ISM Services Index for May 2022 – Forecast 56.4, versus 57.1 previous.
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