USD/JPY Forex Technical Analysis – Strong US Nonfarm Payrolls Growth Could Drive Prices Higher
The dollar/yen trades earlier on Friday as the greenback takes a breather after a strong two-day rise. The move helps ease pressure from the US Federal Reserve’s hawkish policy rhetoric. Traders may also line up ahead of today’s US Nonfarm Payrolls report.
There is also speculation that China may ease anti-COVID restrictions, which have hampered economic activity. This helps reduce the attractiveness of the US dollar as a safe-haven asset.
Overall dollar/yen price action has been relatively more subdued this week on concerns about further intervention by Japanese authorities.
Finance Minister Shunichi Suzuki said Japan’s monetary interventions were stealth operations aimed at maximizing the effects of its market forays as the government spent a record $43 billion to prop up the yen last month. last.
At 10:00 GMT, USD/JPY is trading at 147.802, down 0.463 or -0.31%. On Thursday, the Invesco CurrencyShares Japanese Yen Trust ETF (FXY) settled at $62.99, down $0.17 or -0.26%.
US labor market data at your fingertips
USD/JPY investors were turning their attention to key US employment data at 12:30 GMT, with economists polled by Reuters expecting nonfarm payrolls to show an increase of 197,000 jobs in October.
An upside surprise in the headline figure or a downside surprise in the jobless rate would bolster the Fed’s higher terminal rate stance and keep the US dollar bid, but a weaker print may weigh on the dollar . A rise in the unemployment rate could also have the same effect.
A higher spike in US rates also means more pain for the Japanese yen, which has fallen victim to widening interest rate differentials due to the Bank of Japan‘s accommodative policy.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. However, the trend is downward. A trade through 148.849 will signal a resumption of the uptrend and shift momentum higher. The main trend will turn down on a trade through 145.113.
The short-term range is 151.945 to 145.113. Its 50% level at 148,529 is currently being tested.
The main range is 140.353 to 151.945. Its 50% level at 146.149 is the closest support. Further support comes in at 143.913.
Daily Swing Chart Technical Forecast
Traders’ reaction to the 50% level at 148.529 should determine USD/JPY’s direction on Friday.
A sustained move above 148.529 will indicate the presence of buyers. Pulling back 148.849 will indicate that buying is strengthening. This could trigger an upward acceleration as resistance only comes in at 151.945.
A sustained move below 148.529 will signal the presence of sellers. If that creates enough downside momentum, look for a break in the pivot at 146.149. If that fails, look for a move to 145.113. A trade through this level could extend selling to 143.913.