- The USD/JPY retreats after the dismal US ADP data.
- FOMC left rates unchanged with a hint to hike in the next meeting.
- The technical picture looks gloomy, with more losses towards 150.00
The USD/JPY price slumped on Thursday. The pair stands at 150.41, far below yesterday’s high of 151.68. The profit-taking has triggered a corrective downside.
The USD took a hit from the US ADP Non-Farm Employment Change, which came in at 113K versus 149K expected, while the ISM Manufacturing PMI dropped from 49.0 to 46.7 points in the last trading session.
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The JOLTS Job Openings came in at 9.55M compared to 9.34M, but it has failed to save the greenback from the downside.
Also, the Federal Reserve left the Federal Funds Rate at 5.50% as expected but signaled a potential hike in the upcoming meetings if inflationary pressure remains high.
Today, the Japanese Monetary Base reported 9.0% growth compared to the 5.9% growth estimated, while the 10-y Bond auction came in at 0.91|3.6.
Later, the Bank of England monetary policy meeting could greatly impact all markets. The Official Bank Rate is expected to remain at 5.25%, but BOE Gov. Bailey Speaks could shake the markets.
Furthermore, US Unemployment Claims could be reported at 210K again, while Factory Orders may announce a 2.2% growth compared to the 1.2% in the previous reporting period.
USD/JPY Price Technical Analysis: Leg Down
Technically, the USD/JPY price turned to the downside after failing to take out the upper median line (UML). Also, its failure to stay above the weekly R2 of 151.35 announced exhausted buyers. It has taken out the inside sliding line (SL), which represented dynamic support, signaling more declines. Now, the price has stabilized under the weekly R1 of 150.47.
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A new lower low activates more declines. The 150.00 psychological level represents a potential target. In addition, the weekly pivot point of 149.89 and the median line (ml) of the descending pitchfork are seen as downside targets. A larger drop could be activated only after taking out these obstacles.
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