- Annual wage growth rises to 2.9% in the U.S. in August.
- Nonfarm payrolls increase more than expected.
- US Dollar Index leaps to daily tops near 95.30.
The USD/JPY pair continued to retrace yesterday’s losses in the early NA session as the greenback gathered strength on the upbeat employment report from the United States. At the moment, the pair is up 0.22% on the day at 111.
Today’s data showed that following July’s 147K growth, nonfarm payrolls in August increased by 201K to beat the market expectation of 191K. Meanwhile, the unemployment rate remained unchanged at 3.9%. Finally, the average hourly earnings rose 0.4% in August on a monthly basis to lift the annual rate up to 2.9% compared to the market consensus of 2.7%. The US Dollar Index, which struggled to make a decisive recovery above the 95 mark for the majority of the day, jumped to a daily high near 95.30 and was last seen near that level, where it was up 0.38% on the day.
However, the pair could struggle to extend higher in the remainder of the session if major equity indexes in the U.S. stay under pressure for the third day in a row. Uncertainty surrounding NAFTA negotiations and China tariffs as well as a sharp fall witnessed in Tesla shares in pre-market trading could weigh on the market sentiment in the session and help the JPY stay resilient against other currencies as a safe-haven.
Technical levels to consider
The pair could face the first support at 110.70 (100-DMA) ahead of 110 (psychological level) and 109.40 (Jun. 26 low). On the upside, resistances are located at 111.30 (50-DMA), 111.80 (Aug. 29 high) and 112.15 (Aug. 1 high).
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