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USDJPY Market Analysis

12/1/2022 12:42 PM

The yen holds the lead in the USD/JPY pair, trading around 136.72.

Japan's industrial output lost 2.6% in October after falling 1.7% a month earlier, but the Economy Ministry forecasted an upward correction of 3.3% in November and a slowdown to 2.4% in December. Against this background, Manufacturing PMI also showed a negative trend to 49.0 points from 49.4 points earlier. Tomorrow, the national currency may receive the necessary support, as the speech of the Bank of Japan Governor Haruhiko Kuroda is expected, within the framework of which the next plans to support the yen exchange rate may be announced.

The US dollar is falling, trading around 105.600 in the USD Index. Investors largely shrugged off an estimated 2.9% growth in US Q3 gross domestic product (GDP), following a previous 2.6% rise, and instead turned their attention to another downturn in the labor market, with nonfarm payrolls falling to 127.0K from 239.0K in October. As part of the JOLTS report, the US Bureau of Labor Statistics (BLS) reported a decrease in the number of open vacancies in October to 10.334M from 10.678M a month earlier. Today, data on initial jobless claims will be published, and, judging by the negative dynamics of the number of jobs, the figure may increase, putting even more pressure on the dollar.

On the daily chart of the asset, the trading instrument is moving below the global ascending corridor, dropping to the lows of July.

Technical indicators maintain a stable sell signal: fast EMAs on the Alligator indicator are held below the signal line, and the AO oscillator histogram forms downward bars below the transition level.

Resistance levels: 138.70, 142.10. | Support levels: 135.50, 130.80.

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