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USD/JPY Nears Crucial Juncture, US NFP Next

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Aayush Jindal

Key Highlights

  • USD/JPY failed to accelerate higher above the 110.40 region.
  • A key bullish trend line is forming with support near 109.75 on the 4-hours chart.
  • EUR/USD climbed further above 1.1850, and GBP/USD broke the 1.3800 resistance.
  • The US nonfarm payrolls could increase 750K in August 2021, down from 943K.

USD/JPY Technical Analysis

The US Dollar attempted an upside break above 110.50 against the Japanese Yen. However, USD/JPY failed near 110.40 and it started a fresh downside correction.

Looking at the 4-hours chart, the pair corrected lower below the 110.20 support zone. There was a break below the 50% Fib retracement level of the upward move from the 109.58 swing low to 110.42 high.

The pair is now trading just below 110.00, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

The main breakdown support seems to be forming near 109.75. There is also a key bullish trend line forming with support near 109.75 on the same chart. The trend line coincides with the 76.4% Fib retracement level of the upward move from the 109.58 swing low to 110.42 high.

A downside break below the trend line support could spark a drop towards the 109.00 support. On the upside, an immediate resistance is near the 110.20 zone.

The main resistance is near the 110.50 zone. A close above the 110.50 resistance might open the doors for a steady increase. The next major resistance sits near 110.80 and 111.00.

Looking at EUR/USD, the pair extended its increase above the 1.1850 resistance zone. Besides, GBP/USD gained strength for a move above the key 1.3800 resistance zone.

Economic Releases

  • Germany’s Services PMI for August 2021 - Forecast 61.5, versus 61.5 previous.
  • Euro Zone Services PMI for August 2021 – Forecast 59.7, versus 59.7 previous.
  • UK Services PMI for August 2021 – Forecast 55.5, versus 55.5 previous.
  • US Services PMI for August 2021 – Forecast 55.2, versus 55.2 previous.
  • US nonfarm payrolls for August 2021 – Forecast 750K, versus 943K previous.
  • US Unemployment Rate for August 2021 - Forecast 5.2%, versus 5.4% previous.
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