- USD/JPY started a fresh increase above the 110.00 resistance zone.
- It broke a key bearish trend line with resistance near 109.75 on the 4-hours chart.
- The US ISM Services PMI increased from 62.7 to 64.0 in May 2021.
- The US nonfarm payrolls could increase 664K in May 2021, up from the last 266K.
USD/JPY Technical Analysis
The US Dollar remained well bid above the 109.30 zone against the Japanese Yen. USD/JPY started a fresh increase and it cleared a few major hurdles near the 109.75 zone.
Looking at the 4-hours chart, the pair gained pace above the 109.50 and 109.75 levels. The pair also settled well above the 109.80 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
The pair traded above the 61.8% Fib retracement level of the downward move from the 110.19 high to 109.32 low. There was also a break above a key bearish trend line with resistance near 109.75 on the same chart.
If there is a clear break above the 110.20 level, the pair could accelerate higher. The next major resistance is near the 110.50 level.
On the downside, the pair is likely to remain stable above the 109.65 level. The main support is now forming near the 109.30 level, below which the pair could slide towards the 108.80 level.
Fundamentally, the US ISM Services PMI for May 2021 was released yesterday by the Institute for Supply Management (ISM). The market was looking for an increase from 62.7 to 63.0.
The actual result was better than the market forecast, as the US ISM Services PMI increased from 62.7 to 64.0. Besides, the ISM New Orders Index rose from 63.2 to 63.9.
- US nonfarm payrolls for May 2021 – Forecast 664K, versus 266K previous.
- US Unemployment Rate for May 2021 - Forecast 5.9%, versus 6.1% previous.
- Canada’s employment Change for May 2021 – Forecast -20K, versus -207.1K previous.
- Canada’s Unemployment Rate for May 2021 - Forecast 8.2%, versus 8.1% previous.