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
USDJPY Daily
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
USDJPY 4 hour
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
USDJPY 1 hour
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%.