USD/JPY Pulls Back Off Session Highs After US Non-Farm Payrolls

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The USD/JPY currency pair on Friday extended 3-day gains towards 108.500 before pulling back late on to settle at 108.253 after the US NFPs. The currency pair continues to trade under significant bearish pressure after pulling back off 2-month highs of about 111.900 late last month.

The pair is currency pegged between the 100-hour and the 200-hour SMA lines following this week’s gains. The pullback late on Friday pushed it back to the normal trading zone of the 60-min RSI off overbought levels.

USD/JPY Fundamentals Overview

From a fundamental perspective, the USD/JPY currency pair is trading at the back of a relatively busy period in the market. The coronavirus pandemic continues to take center stage as global financial markets struggle. Worldwide country lockdowns have become a bottleneck for business activity amid the coronavirus pandemic.  

In the US, the non-farm payroll data came out worse than expected with over 700k jobs lost in March as compared to an expectation of -100k. This pushed the unemployment rate to a multi-year high of 4.4% versus an expectation of 3.8%. However, the average hourly wage growth beat the consensus estimate of 3.0% with 3.1%. On the other hand, the ISM non-Manufacturing PMI for March beat the expectation of 44 with 52.5 while the non-Manufacturing Employment Index missed 53.7 with 47.

In Japan, Jobs/applicants ratio for Feb. missed the expectation of 1.47 with 1.45 down from 1.49 in the previous month while the unemployment rate was in line at 2.4%. Retail Trade, Industrial production, and manufacturing outlook all outperformed estimates.

USD/JPY Technical Analysis (the 60-min Chart)

Technically, the USD/JPY currency pair appears to have recently bounced off new 2-week lows of about 106.850. The currency pair appears to be on course to complete a XABCD reversal pattern. 

The bulls will target short-term profits at around 108.915, 109.519, or higher at 110.256. On the other hand, the bears will target pullback profits at around 107.469 or lower, 106.854 or 106.030.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair appears to have recently made a sharp rebound. This comes hot on the heels of another sharp plunge; which highlights the high level of volatility in the market.

The bulls will be targeting long-term profits at around 109.744, 112.283 or higher at 114.117. On the other hand, the bears will look to pounce for profits at around 105.762, 103.565, or lower at 101.186.

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