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USD/JPY Faces Selling Pressure Ahead of US NFP Release

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Aayush Jindal

Key Highlights

  • USD/JPY is facing a strong resistance near the 130.00 zone.
  • A crucial bearish trend line is forming with resistance near $129.80 on the 4-hours chart.
  • Yesterday, gold price and crude oil price saw a strong bearish reaction.
  • The US nonfarm payrolls could increase 185K in Jan 2023, down from 223K.

USD/JPY Technical Analysis

The US Dollar attempted an upside break above the 130.50 resistance against the Japanese Yen. However, USD/JPY failed to settle above 130.50 and started a fresh decline.

Looking at the 4-hours chart, the pair declined below the 130.00 and 129.20 support levels. There was also a close below the 130.00 level, the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).

It tested the 128.00 zone and started a consolidation phase. On the upside, the pair is facing resistance near 129.50 and the 100 simple moving average (red, 4-hours).

The first major resistance is near the 130.00 level. There is also a crucial bearish trend line forming with resistance near $129.80 on the same chart. A clear move above the 130.00 resistance might start a steady increase towards the 135.50 resistance zone.

Any more gains could open the doors for a move towards the 131.20 level. The next key hurdle is near 132.00, above which the pair could climb towards the 133.50 resistance zone.

On the downside, there is a key support at 128.00. The next major support sits near the 127.40 level. Any more losses might open the doors for a move towards the 126.00 support zone.

Looking at gold price, there was a strong bearish reaction after the bulls failed to keep the price above the $1,950 resistance zone.

Economic Releases

  • Germany’s Services PMI for Jan 2023 - Forecast 50.4, versus 50.4 previous.
  • Euro Zone Services PMI for Jan 2023 – Forecast 50.7, versus 50.7 previous.
  • UK Services PMI for Jan 2023 – Forecast 48.0, versus 48.0 previous.
  • US Services PMI for Jan 2023 – Forecast 50.3, versus 49.6 previous.
  • US nonfarm payrolls for Jan 2023 – Forecast 185K, versus 223K previous.
  • US Unemployment Rate for Jan 2023 - Forecast 3.6%, versus 3.5% previous.
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