USD/JPY Bearish Targets Sub-133.50 in US Jobs Report

Sub Levels –

Another quiet start to the day for USD/JPY. There are no Japanese economic indicators for investors to consider.

In the absence of economic data, USD/JPY will have to react more to US economic data. First unemployment claims he rose to 242,000 from 229,000, while nonfarm productivity fell 2.7% in the first quarter. Economists forecast a modest decline of 1.8%. Importantly, unit labor costs jumped 6.3% versus the 5.5% forecast for the quarter.

Fears of a banking sector and recession added early pressure to USD/JPY, while economic data revealed further cracks in the US economy.

US dollar/yen price movement

USD/JPY fell 0.06% to 134.185 this morning. A mixed start to the day that saw USD/JPY rise to an early high of 134.311 before falling to a low of 134.170.

USDJPY 050523 daily chart

technical indicator

Resistance and support levels

R1 – ¥ 134.9360 S1 – ¥ 133.5510
R2 – ¥ 135.6010 S2 – ¥ 132.8310
R3 – ¥ 136.9860 S3 – ¥ 131.4460

USD/JPY needs to cross the 134.216 pivot to target the first major resistance level (R1) at 134.936. A move past Thursday’s high of 134.881 signals a bullish USD/JPY session. However, market risk sentiment and US economic data should support a USD/JPY breakout.

In case of a prolonged rally, the bulls may test the second major resistance level (R2) at 135.601. The third major resistance level (R3) is 136.986.

Not passing the pivot leaves the first major support level (S1) at 133.551. However, in the absence of dollar selling, the USD/JPY pair will need to break below 133 levels and his second major support level (S2) at 132.831. The third major support level (S3) is 131.446.

USDJPY 050523 hourly chart

Looking at the EMA and the 4-hour chart, the EMA is sending a bearish signal. USD/JPY is above the 200-day EMA (134.030). The 50-day EMA has narrowed to the 100-day EMA and the 100-day EMA has approached the 200-day EMA, giving a bearish signal.

USD/JPY’s 100-day (134.601) move supports a breakout from R1 (134.936) and the 50-day EMA (135.127) to target R2 (135.601). However, below the 200-day EMA (134.030), S1 (133.551) will come into view. A crossing of the 50-day EMA will send a bullish signal.

USDJPY 050523 4-hour chart

usa session

Turning to the US session, it’s a busy day on the US economic calendar. The US Jobs Report is today’s main report.

Rebounding wage growth and a surge in nonfarm payrolls raise hopes of a rate hike in June. However, weak non-farm payrolls will weigh heavily.

Beyond the economic calendar, we need to consider the banking sector, the US debt ceiling, and corporate earnings.

This article was originally posted on FX Empire

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The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.

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