USD/JPY Forecast: Trading Above 133.00 Ahead of the Nonfarm Payrolls

USD/JPY Forecast: Trading Above 133.00 Ahead of the Nonfarm Payrolls

  • The pair is expected to fall further to 132.00.
  • JP Morgan researchers forecast poor NFP results.
  • Japan’s economy recovered in Q2.

The USD/JPY price forecast remains negative as the hurdles that the USD/JPY pair encountered around 133.00 during the Asian session are now in full force. As investors anticipate a weak performance from the US Nonfarm Payrolls (NFP) report, the asset has printed a low of 132.77 and is projected to decline further to approximately 132.00.

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JP Morgan researchers forecast that the US Nonfarm Payrolls (NFP) will be worse than expected at 200K in the July labor market data, compared to the consensus estimate of 250K jobs added in the month.

The US economy created 372k new jobs in the labor market in June. The labor market is under tremendous pressure due to data showing a continuing decline in job creation. The unemployment rate, however, will hold steady at 3.6 percent.

Increased labor market hazards result from rising interest rates and their compounding effects. Due to expensive dollars, business players are hesitant to invest. Low investment prospects cannot, therefore, hasten the process of creating jobs.

According to a Reuters poll released on Friday, strong consumer spending on in-person services, which were no longer constrained by coronavirus restrictions, helped Japan’s economy recover in April-June after contracting in the prior quarter.

USD/JPY key events today

US Nonfarm Payrolls, which excludes the farming sector, tracks the change in the number of individuals employed during the preceding month. Job creation is the primary measure of consumer spending, which drives most economic activity.

Investors will get to see the percentage of the labor force that is jobless and actively looking for work over the preceding month is measured by the unemployment rate.

USD/JPY technical forecast: Rejection around 50 Fib level at 134.00

USD/JPY forecast

Looking at the 4-hour chart, we see the price was rejected at the 50.00 Fibonacci level and is currently pushing lower. This fib level has acted as resistance with confluence at the 134.00 psychological level.

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The price has found support at the 30-SMA and might retest the fib level before possibly breaking below the SMA. The RSI has already started trading below 50, showing the sentiment has turned bearish. If the price breaks below the 30-SMA, it might retest support at 130.652 before possibly breaking below the level.

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Saqib Iqbal

Saqib Iqbal

Saqib Iqbal is a market analyst, prop fund trader and mentor, serving the industry with his analysis and educational content since 2011. The author has great exposure to different financial markets and institutions. He's well-known for his day trading reviews and multiple timeframe analysis.