USD/JPY has been climbing to fresh recovery highs, back onto the 114 handle having scored a high of 114.06 in the Tokyo open, up from the late Europen lows of 113.64 with a late rise of US stocks with the both the DJIA and S&P recovering and climbing from S1. USD/JPY is likely to remain on the front foot with nonfarm payrolls expected to be a good one and just around the corner.
Key notes for the event (Joseph Trevisani FXStreet):
- US labor market is forecast to have produced 188,000 new jobs in September, but recent data suggest the risk is for a stronger number. The unemployment rate is expected to drop to 3.8 percent and wages to have gained 3.0 percent on the year.
- The Treasury sell-off is roiling markets, supporting the dollar against a wide range of currencies particularly in emerging markets.
- Brexit negotiations appear to be back on track after Prime Minister Theresa May’s successful speech at the Conservative Party conference.
Meanwhile, EM-FX, China’s economic performances and yields on the rise in developed markets are all factors to consider as well while the pair emains in an uptrend with the dollar falling back in favour.
- Support levels: 113.60 113.30 112.95
- Resistance levels: 114.40 114.75 115.00
Valeria Bednarik, Chief Analyst at FXStreet explained that the pair stalled its intraday decline at around 113.60, a strong static support level:
“Holding nearby, the risk of another leg lower has not been avoided, although intraday technical readings continue to support the bullish case, as in the 4 hours chart, the pair is still developing far above bullish moving averages, while technical indicators pared their declines and are currently trying to bounce from their midlines. A critical long-term resistance comes at around 114.75, the level to surpass to convince bears to give up.”