Key Highlights
- The US Dollar found support near the 108.10 level and recovered slightly against the Japanese Yen.
- On the upside, there is a strong resistance near 109.75 and the 100 simple moving average (4-hour).
- The US Initial Jobless Claims in the week ending May 26, 2018 declined from 234K to 221K.
- Today in the US, the NFP figure for May 2018 will be released, which is forecasted to post 188K.
USDJPY Technical Analysis
The US Dollar formed a decent support base near the 108.20 level against the Japanese Yen. The USD/JPY started an upside recovery, but the pair is facing many hurdles on the upside near 109.25 and 109.75.
Looking at the 4-hours chart, there was a downside break below a bullish trend line and the pair settled below the 100 (red) and 200 (green) simple moving average (4-hour) and 109.00. Later, it found buyers around 108.20 and staged a comeback.
The pair traded above the 108.50 resistance, but there are many key resistances on the upside. First, the 200 SMA is near the 109.25-30 zone, which was a support earlier. Above 109.30, the 50% Fib retracement level of the last drop from the 111.39 high to 108.11 low is at 109.75.
More importantly, the 100 SMA is positioned above the 109.75 level to prevent gains. Therefore, if the pair continues to move higher, it could face a strong barrier near 109.75 and the 100 SMA.
On the downside, the 108.10-20 zone is a strong support. A break below this may perhaps open the doors for more losses towards 107.50.
Recently in the US, the Initial Jobless Claims figure for the week ending May 26, 2018 was released by the US Department of Labor. The market was looking for a decline from the last reading of 234K to 228K.
However, the actual result was better as there was a decline in claims to 221K. The report added:
The advance number for seasonally adjusted insured unemployment during the week ending May 19 was 1,726,000, a decrease of 16,000 from the previous week’s revised level.
Today, the US NFP report for May 2018 could impact the market sentiment. Pairs such as EUR/USD and GBP/USD may perhaps recover higher if the outcome disappoints. Alternatively, the US Dollar is likely to resume uptrend if the result beats the forecast.
Economic Releases to Watch Today
- Germany’s Manufacturing PMI for May 2018 – Forecast 56.8, versus 56.8 previous.
- Euro Zone Manufacturing PMI May 2018 – Forecast 55.5, versus 55.5 previous.
- UK Manufacturing PMI for May 2018 – Forecast 53.5, versus 53.9 previous.
- US nonfarm payrolls May 2018 – Forecast 188K, versus 164K previous.
- US Unemployment Rate May 2018 – Forecast 3.9%, versus 3.9% previous.
- US Manufacturing PMI for May 2018 – Forecast 56.6, versus 56.6 previous.
