USDJPY Eyes 111.00 After Downbeat Nonfarm Payrolls

The US Dollar (USD) extended upside movement against the Japanese Yen (JPY) on Monday, increasing the price of USDJPY to more than 107.40 following the release of US nonfarm payrolls data last week. The technical bias remains bearish because of a Lower Low the recent downside move.

Technical Analysis

As of this writing, the pair is being traded near 107.52. A support may be noted around 107.00, the psychological number ahead of 106.43, the intraday low of Friday and then 105.54, the swing low of the last major downside move as demonstrated in the following daily chart.

On the upside, the pair is likely to face a hurdle near 108.44, a major horizontal resistance area ahead of 109.00 and 110.00, the psychological levels and then 111.00, another major horizontal resistance level. The technical bias will remain bearish as long as the 111.86 resistance area is intact.

Nonfarm Payrolls

The U.S. economy created just 160,000 jobs in April, lower than economist expectations, while the unemployment rate held steady at 5 percent. On the bright side, wages rose during the month, with average hourly earnings up 8 cents an hour, representing a 2.5 percent annualized gain. The average work week edged higher to 34.5 hours, according to the Bureau of Labor Statistics, which issues the monthly jobs report. Those counted as not in the labor force surged by 562,000 for the month to more than 94 million.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair around 111.00 resistance area could be a good strategy in short to medium term.

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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