Search ForexCrunch

The ADP Non-Farm  Employment Change  measures the change in the number of employed people in the US, excluding workers in the farming industry. A reading which is higher than the market forecast is bullish for the dollar.

Here are the details and 5 possible outcomes for USD/JPY.

Published on Wednesday at 12:15 GMT.

Indicator Background

Job creation is one of the most important leading indicators of overall economic activity. Thus publication of employment  data, such as the Non-Farm Employment Change, is highly anticipated by the markets. Traders should note that the ADP indicator is released two days prior to  the official government publication of Non-Farm Employment Change.

In March, the indicator rose to 216K, exceeding the market forecast of 204K. The market  forecast for  April  is down slightly,  to 209K. Will the indicator repeat and beat the market forecast this month?

Sentiment and Levels

With the Japanese fiscal year over, there is further room for the pair to move upwards. If there is positive economic data out of the US this week, we could see the dollar rally. So, the sentiment  has turned from neutral to  bullish on USD/JPY towards this release.

Technical levels from top to bottom: 84, 83.20, 82.87, 81.80,  81.43 and 80.60.

5 Scenarios

 

  1. Within expectations:  203K to 215K: In this scenario, USD/JPY could show some slight fluctuation, but it is likely to remain within range,  without breaking any levels.
  2. Above expectations:  216K to 222K: A reading above expectations would signal economic expansion,  and could  push the pair  above one  resistance level.
  3. Well above expectations: Above 222K: A sharp rise in employment  numbers could propel  USD/JPY upwards, and two levels of resistance  or more could be broken.
  4. Below expectations: 196K to 202K: A weak reading could pull the pair downwards, with one support level at risk.
  5. Well below expectations: Below 196K:  Such a scenario would be bearish for the dollar, and USD/JPY could break two  or more support levels.

For more on the yen, see the  USD/JPY forecast.