USD/JPY: awaiting nonfarm payrolls, no traction either way on or below 113 the figure


Currently, USD/JPY is trading at 113.20, down -0.05% on the day, having posted a daily high at 113.48 and low at 112.89.

USD/JPY has been forming a downside case in the last couple hours of the US session, capping the 112.80’s reversal on the short term time frames.  

USD/JPY from 113.50 with a decline in global equities that has spilled over into U.S. stocks. This follows European markets that closed in the red. The Stoxx 600 index fell 0.7% on losses in all but three of 19 main industry groups. S&P 500 down 0.6% to 2,413. Dow Jones is lower to 21,344.

Besides a risk-off tone, US data wasn’t as good as expected in the private payrolls, ADP, that rose by 158k (est. 188k) after revised 230k gain in May. The overall measure of consumer comfort was at 48.5, the lowest since February, after 48.6 the prior week. 

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Also, Donald Trump warned the future of the West is in peril in a speech in Poland ahead of the G20 meeting: 

“The fundamental question of our time is whether the West has the will to survive. Do we have the confidence in our values to defend them at any cost? Do we have enough respect for our citizens to protect our borders? Do we have the desire and the courage to preserve our civilisation in the face of those who would subvert and destroy it?”

USD/JPY levels

USD/JPY that reached a high circa of 113.60 was sold into and subsequently, left prospects for the previous monthly R1 at 113.94 out of focus. With a break of 113.20, the downside eyes 112.88 5th July lows. However, Valeria Bednarik, chief analyst at FXStreet explained that it seems unlikely the pair will see much action ahead of the US monthly employment report:

“Pullbacks continue to met buying interest at  112.90, a Fibonacci support, whilst in the 4 hours chart, the 100 and 200 SMAs advanced further below the current level, maintaining their bullish slopes. In the same chart, the Momentum indicator turned higher in positive territory, while the RSI hovers around 55.”

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