USD/JPY: Trading the US Unemployment June 2012

USD/JPY: Trading the US Unemployment June 2012

The US Unemployment Claims, a key  indicator, is released weekly. It measures the number of people  who filed  for unemployment for the first time during the previous week. A reading which is higher than the market forecast is bearish for the dollar.

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

Published on Thursday at 12:30 GMT.

Indicator Background

Unemployment claims is important economic indicator of consumer confidence in the economy. It helps measure future spending behavior, as more jobs leads to increased spending. In turn, an increase in consumer spending sends a strong signal that the economy is healthy and growing.

The previous release came in at 377 thousand unemployed people, slightly below the market forecast of 381K. The forecast for this week is almost unchanged, with an estimate of 378K.

Sentiments and levels

We may  continue  to  some relative stability  in the currency markets  until the Greek elections on Sunday. Adding the lack of QE, in the US,at least for now, and the Japanese will to weaken the local currency, there are better chances that the yen will fall. So, the sentiment  is neutral on USD/JPY towards this release.

Technical levels, from top to bottom: 81.43, 80.20, 80, 79.60,  79 and 78.30.

5 Scenarios

  1. Within expectations: 372K to 384K : In such a case, USD/JPY is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 365K to 371K: An unexpected lower reading can send the pair  above one resistance line.
  3. Well above expectations: Below 365K: Strong employment numbers would be bullish for the dollar. Two or more lines of resistance might be broken on such an outcome.
  4. Below expectations: 384K to 390K: A poor reading could push USD/JPY lower, and one  support level  could be broken.
  5. Well below expectations: Above 390K. In this scenario, the pair could break below two or more  support levels.

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

Kenny Fisher

Kenny Fisher

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.