USD/JPY – US Dollar Awaits NFP Report for Next Move Vs Japanese Yen
Aayush Jindal
Key Highlights
The US Dollar remains in a downtrend against the Japanese Yen with a close below 111.00.
There is a major descending channel with resistance near 110.40 forming on the 4-hours chart of USD/JPY.
The US Factory orders figure for June 2017 was recently released, which posted an increase of 3% (MoM).
Today, the US Nonfarm payrolls figure for July 2017 will be released, which is slated for 183K, against the previous 222K.
USDJPY Technical Analysis
The US Dollar started a downtrend in July 2017 from 114.50 against the Japanese Yen. The USD/JPY pair remains on the edge and awaits the US NFP report for the next move.The pair is currently consolidating losses above the 110.00-109.80 support. There is a major descending channel with resistance near 110.40 forming on the 4-hours chart.Above the channel resistance, there is a bearish trend line at 110.55. Furthermore, the 50% Fib retracement level of the last decline from the 110.98 high to 109.84 low is at 110.41.Therefore, it seems like there is a major resistance forming near 110.50-60 ahead of a crucial release. Any major deviation from the market forecast could result in a significant break for USD/JPY either above 110.50 or below 109.80.
US Factory Orders
Recently, the US saw the release of the Factory orders figure for June 2017 by the US Census Bureau. The market was looking for an increase of around 2.9% compared with the previous month.However, the outcome was better, as there was a rise of 3%. And, the last reading was revised up from -0.8% to -0.3%. The report added that:
New orders for manufactured goods in June, up following two consecutive monthly decreases, increased $14.0 billion or 3.0 percent to $481.1 billion.
Overall, the result was positive, which helped USD/JPY and the pair held the 109.80 support level.
US Nonfarm Payrolls
Today, the US nonfarm payrolls for July 2017 will be released by the US Department of Labor. The market is looking for 183K, less than the last 222K. Moreover, the US Unemployment Rate is forecasted to decline from 4.4% to 4.3% in July 2017.If the actual result come in line with the forecast or exceeds it, the US Dollar may recover above 110.50 against the Japanese Yen. On the other hand, if it disappoints, the USD/JPY pair may decline towards 109.40.
The pair is currently consolidating losses above the 110.00-109.80 support. There is a major descending channel with resistance near 110.40 forming on the 4-hours chart.Above the channel resistance, there is a bearish trend line at 110.55. Furthermore, the 50% Fib retracement level of the last decline from the 110.98 high to 109.84 low is at 110.41.Therefore, it seems like there is a major resistance forming near 110.50-60 ahead of a crucial release. Any major deviation from the market forecast could result in a significant break for USD/JPY either above 110.50 or below 109.80.
However, the outcome was better, as there was a rise of 3%. And, the last reading was revised up from -0.8% to -0.3%. The report added that: