USD/JPY: Trading the US JOLTS Job Openings

US  JOLTS  (Job  Openings and Labor Turnover Summary) Job  Openings  measures the change in the number of job openings, 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 Tuesday at 14:00 GMT.

Indicator Background

Job creation is one of the most important leading indicators of overall economic activity. Thus, the publication of employment data such as Job Openings  is highly anticipated by the markets, and an unexpected reading could affect the direction of USD/JPY. With QE tapering a hot topic, employment releases such as Job Openings are especially important.

Job Openings has  steadily risen over the past three months. The July estimate  rose to 3.94 million, beating the  estimate of 3.91 million. The markets expect the upward  trend to continue,  with an estimate of 3.96 million.

Sentiment and Levels

Speculation continues  that the Federal Reserve could pull the trigger on QE tapering as early as September, and  such talk  is bullish for the dollar. The 100 level was breached  last  week, and USD/JPY could make another move  towards this tempting  target. So, the overall sentiment is bullish on USD/JPY towards this release.

Technical levels, from top to bottom: 101.44, 100.85, 100, 98.90, 97.80 and 96.71.

5 Scenarios

1. Within expectations:  3.93M to 3.99M. In such a scenario, the USD/JPY is likely to rise within range, with a small chance of breaking higher.
2. Above expectations:  4.00M to 4.04M: An unexpected higher reading can send USD/JPY above one resistance line.
3. Well above expectations: Above 4.04M: The chances of such a scenario are low. Such an outcome would prop up the pair, and a second resistance line might be broken as a result.
4. Below expectations:  3.88M to 3.92M: A smaller increase than forecast could cause USD/JPY to fall below one level of support.
5. Well below expectations: Below 3.88M. In this scenario, USD/JPY could break a second support level.

For more about the USD/JPY, see the USD to JPY forecast.