Aayush Jindal
Key Highlights
- USD/JPY started a decent recovery from the 108.72 low.
- It broke a key bearish trend line at 109.35 on the 4-hours chart.
- EUR/USD trimmed gains after it failed to surpass the 1.1900 resistance.
- The US nonfarm payrolls could increase from 850K to 870K in July 2021.
USD/JPY Technical Analysis
The US Dollar extended its decline below 109.00 before it found support against the Japanese Yen. USD/JPY traded as low as 108.72 before it started a decent recovery.
Looking at the 4-hours chart, the pair recovered above the 109.00 and 109.20 resistance levels. There was also a break above a key bearish trend line at 109.35. The pair surpassed the 109.40 resistance level.
There was a break above the 50% Fib retracement level of the key decline from the 110.85 swing high to 108.72 low. An immediate resistance on the upside is near the 109.90 level and the 100 simple moving average (red, 4-hours).
The 61.8% Fib retracement level of the key decline from the 110.85 swing high to 108.72 low is also near 109.87. Any more gains could set the pace for a move towards the 110.50 and 110.65 levels.
If not, there is a risk of a fresh decline below 109.30. The next key support is near 109.00, below which the pair could decline towards the 108.50 level.
Looking at EUR/USD, the pair made another attempt to clear the 1.1900 resistance, but it failed. Similarly, GBP/USD is facing a strong resistance near the 1.4000 zone.
Economic Releases
- US nonfarm payrolls for July 2021 – Forecast 870K, versus 850K previous.
- US Unemployment Rate for July 2021 - Forecast 5.7%, versus 5.9% previous.
- Canada’s employment Change payrolls for July 2021 – Forecast 177.5K, versus 230.7K previous.
- Canada’s Unemployment Rate for July 2021 - Forecast 7.4%, versus 7.8% previous.
