USD/JPY: Two way action and back to square one

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 4, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    The USD/JPY turned lower from the post-non-farm payrolls highs of 114.21 and dropped to 113.24 before recovering to today’s opening price of 113.70.

    Weak wage growth data hurts

    The entire move indicates both bulls and bears had an equal opportunity to flex their muscles. Bulls took the pair higher to 114.21 in response to strong payrolls figure. However, bears regained control and pushed the pair lower to 113.70 in response to a 0.1% m/m drop in the average weekly earnings.

    Moreover, the details reveal average weekly earnings dropped from 878.15 to just 872.04, i.e. -0.7%, which is the biggest monthly drop in the entire series history. However, the pair is once again catching a bid wave; trading around 113.80.

    USD/JPY Technical Levels

    The immediate hurdle is seen at 114.00, above which the pair could target 114.48 (23.6% of June 2015 high-Feb 2016 low), which if breached shall open doors for a rally to 114.87 (Feb 16 high). On the other hand, a breakdown of immediate support at 113.56 (5-DMA) could see the spot re-test 113.19 (10-DMA). A break lower could see prices drift lower to 112.15 (March 1 low).
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