Key Highlights
- USD/JPY started a major downtrend from well above the 110.00 level.
- A crucial bullish trend line was breached with support near 109.10 on the daily chart.
- The US Initial Jobless Claims for the week ending Feb 29, 2020 declined from 219K to 216K.
- The US nonfarm payrolls could increase 175K in Feb 2020, less than the last 225K.
USD/JPY Technical Analysis
The US Dollar started a significant decline from the 112.22 high against the Japanese Yen. USD/JPY broke many supports near the 108.80 and 108.00 levels to enter a bearish zone.
Looking at the daily chart, the pair settled well below the 108.00 support, the 100-day simple moving average (red), and the 200-day simple moving average (green).
Additionally, the pair declined below the 50% Fib retracement level of the key rally from the 104.44 low to 112.22 high. More importantly, there was a break below a crucial bullish trend line with support near 109.10 on the same chart.
The pair is now trading below 107.50 and 107.20. An immediate support is near the 106.25 level. The 61.8% Fib retracement level of the key rally from the 104.44 low to 112.22 high could also provide support near 106.28.
Any further losses may perhaps lead the pair towards the 105.00 support. On the upside, there are many hurdles near the 108.00 and 108.40 levels. A successful break above the 108.40 level and the 100-day SMA is needed for a fresh increase.
Fundamentally, the US Initial Jobless Claims figure for the week ending Feb 29, 2020 was released by the US Department of Labor. The market was looking for a decline in claims from 219K to 215K.
The actual result was lower than the forecast, as the US Initial Jobless Claims declined to 216K, with an overall decline of 3K.
The report added:
The 4-week moving average was 213,000, an increase of 3,250 from the previous week’s unrevised average of 209,750.
Overall, USD/JPY is trading in a major downtrend below 108.00 and it remains at a risk of more losses. Conversely, both EUR/USD and GBP/USD are showing signs of more upsides.
Upcoming Economic Releases
- US nonfarm payrolls Feb 2020 – Forecast 175K, versus 225K previous.
- US Unemployment Rate Feb 2020 – Forecast 3.6%, versus 3.6% previous.
- Canada’s Net Employment Change Feb 2020 – Forecast 10K, versus 34.5K previous.
- Canada’s Unemployment Rate Feb 2020 – Forecast 5.6%, versus 5.5% previous.
