Fundamental Overview
The JPY lost some more ground this week following Japan’s PM Ishiba’s comments on Wednesday as he delivered dovish remarks.
As a reminder, the JPY got a boost last week when he was elected because he was viewed as a hawk and supportive for further rate hikes. It turned out that he’s the opposite and therefore the JPY erased the gains.
On the same day, we got a better than expected US ADP report and given the market sensitivity to labour market data, the USD gained across the board as the market pared back the expectations for a 50 bps cut in November.
All eyes today will be on the US NFP report as it's going to influence the magnitude of future Federal Reserve rate cuts.
USDJPY Technical Analysis – Daily Timeframe
On the daily chart, we can see that USDJPY rejected the key swing high level at 147.20. The buyers will want to see the price breaking higher to increase the bullish bets into the 150.00 handle next, while the sellers will look to pile in around these levels with a defined risk above the swing high to position for a drop back into the 140.20 support.
USDJPY Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a minor upward trendline defining the current bullish momentum. The buyers will likely lean on the trendline with a defined risk below it to position for a rally into new highs. The sellers, on the other hand, will want to see the price breaking lower to position for a drop into the next trendline around the 143.00 handle.
USDJPY Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more clearly the rejection from the swing high level. There’s not much else to add here as the buyers will look for a bounce on the trendline or a break above the swing high level, while the sellers will want to see the price breaking below the trendline to increase the bearish bets into the 140.20 support. The red lines define the average daily range for today.
Upcoming Catalysts
Today we conclude the week with the US NFP report where the consensus sees 140K jobs added and the unemployment rate to remain unchanged at 4.2%.
