USDJPY Awaits US NFP For An Important Break

USDJPY Awaits US NFP For An Important Break

By: Simon Furman | Where To Trade | On:06-02-2015 11:54
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Key Highlights

  • US dollar continues to consolidate against the Japanese yen and waiting for a catalyst for a break in the near term.

  • US nonfarm payrolls will be released by the US Department of Labor today, which is expected to register an increase of 234K in January compared with the last gain of 252K.

  • A lot of volatility is expected around the US NFP and the unemployment rate release.

  • Australian HIA/AIG Performance of Construction Index was released by the Australian Industry Group and the Housing Industry Association earlier during Asian which came in at 45.9 in January, compared with the last reading of 44.4.

  • Japanese Foreign-exchange reserves, released by Ministry of Finance registered a reading of $1,261.1B in January 2015, compared with the last reading of $1,260.5B,

  • German industrial production report and France trade balance data are two key releases lined up during the London session, which might cause moves in the Euro pairs.

  • GBPUSD remains one of the best performers of this week with good gains comparatively.

EURJPY

The Euro slowly moved higher against the Japanese yen and traded above the 134.00 resistance area. There is an important support area formed around the 132.20-40 area where there is a bullish trend line on the 4 hour chart. The recent economic releases in the Euro area were also on the positive, which gave a ray of hope to the Euro buyers. The most important resistance on the upside is around the last high of 135.34 level where the Euro sellers might out up a fight. A break above the mentioned level might call for more gains in the pair may be towards the 136.00 level.

Intraday Support Level – 133.60

Intraday Resistance Level – 135.30

  • Overall, as long as the pair is above the highlighted trend line it might continue trading higher.

  • A break below the trend line could take the pair towards the 130.50 level.

The hourly and 4-hour indicators are showing mixed signals, which means there can be a strange price action moving ahead.

USDJPY

The US dollar is waiting for the US non-farm payrolls data, which is likely to spur a lot of volatility in the near term. There is a major bearish trend line formed on the 4 hour chart of the pair, which is likely to act as a catalyst moving ahead. Moreover, the 117.80 level is also an important barrier for the pair, and might protect upside in the pair in the short term. If the US NFP report disappoints, then the pair might dive sharply.

Intraday Support Level – 116.80

Intraday Resistance Level – 117.80

  • Selling rallies around the highlighted trend line look like a good option.

  • A break above the 118.00 level would call for more gains moving ahead.

On the downside, the last low of 116.80 can be considered as a pivot area for USDJPY. If the US dollar sellers gain momentum, then a move below the mentioned level might ignite heavy losses in the USDJPY pair moving ahead.

Simon Furman

Simon Furman

Think Global - Act Local

Simon Furman is one of the best financial analyst with 27 years of trading experience

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