The USD/JPY currency pair on Friday edged higher to trade at around 106.615. However, still remained within the limits of the consolidative triangle pattern. The currency pair has been trading within a slightly bearish triangle formation since the middle of March. This came following the coronavirus-driven US economic lockdown.
The currency pair has now surged to trade closer to the overbought levels of the 14-hour RSI in the 60-min chart amid a short-term spike in bullish sentiment. This comes following the latest release of the US non-farm payrolls data.
USD/JPY Fundamentals Overview
From a fundamental perspective, the USD/JPY currency pair is trading at the back of another busy period in the market. On Monday, the US Factory Orders for March missed the (MoM) expectation of -9.7% with -10.3%. On Tuesday, the US Trade Balance, the ISM non-Manufacturing new orders index missed expectations. The Markit Services PMI and the PMI Composite also came short of estimates. On the other hand, the ISM non-Manufacturing Prices Paid, beat the expectation of 50.3 with 55.1.
On Thursday, non-farm productivity and unit labor costs impressed with -2.5% and 4.8% respectively versus expectations of -5.5% and 4%. And on Friday, labor Force Participation fo rate of 60.2% was below the expected level fo 60% while the average hourly earnings for April outshone the (MoM) expectation of 0.3% with 4.7% growth. The US non-farm payrolls impressed with -20.5M versus an expected figure of-22 million. However, the unemployment rate narrowly missed the expectation of 14% with 14.7%.
USD/JPY Technical Analysis (the 60-min chart)
Technically, the USD/JPY currency pair appears to be lacking a clear direction momentum amid the coronavirus pandemic. The pair continues to trade within a slightly descending consolidative triangle, which could be signaling a slight bearish bias.
The bulls will be looking to extend the gains of the last two days towards 107.216 or higher to 107.990. On the other hand, the bears will look to pounce for profits at around 106.015 or lower at 105.128.
USD/JPY Technical Analysis (the Daily Chart)
In the daily chart, the USD/JPY currency pair appears to have recently pulled back after a sharp recovery. The currency pair is now pegged at the 50% Fib level. It has also plunged closer to oversold levels of the 14-day RSI in the daily chart.
The bulls will be targeting long-term rebound profits at around 23.60% Fib level at 108.984 or higher at 110.723. On the other hand, the bears will target profits at around 61.80% and 76.40% fib levels at 104.887 and 103.524, respectively.