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Fan Yang

USD/JPY is ready to turn bullish; Non-Farm Payroll ahead

We have been following the USD/JPY on its ascent from around the key support of 100 to 104 during the 10/6 session. 

USD/JPY Daily Chart 10/6

(click to enlarge)

Completing a bottom:
- The daily chart shows that price action in October is breaking a prevailing pattern of lower highs and lower lows.
- The lows have been getting slightly higher since the low of 98.85. However, the highs were still getting lower. 
- This week, price reached the September high. 
- Now price is neutral, threatening to turn bullish.
- A break above 104 essentially completes a price bottom and opens up the 107.65 area. 

NFP could play a role:
- The US Non-Farm payroll report due Friday (10/7) during the US session could help the market decide whether the current bottom-building upswing will extend or fizzle. 

Forecast: 171K
August: 151K

The NFP numbers have been showing growth, but not at a strong enough pace that would signal a Fed hike. Ultimately its whether the FOMC will feel comfortable raising rates. A reading that is close to 200K or above should push the USD/JPY towards the next resistance at 107.65

A reading below 170K however would likely stall the current rally. A readying below 150K should pressure USD/JPY back towards 102, which is the middle of the current range roughly between 100 and 104.

US NFP in the past 12 months:


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