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USDJPY Market Update
2/6/2023 10:49 AMThe USD/JPY pair is trading down, correcting after a notable rise last Friday. It should be noted that the instrument also opened with a significant upward gap and is currently trying to level it.
At the end of last week, the American currency was supported by a strong report on the US labor market for January. The economy created more than 500.0 thousand new jobs outside the agricultural sector, while analysts expected only 185.0 thousand, and the data for December were revised from 223.0 thousand to 260.0 thousand. In turn, the Unemployment Rate for the same period decreased from 3.5% to 3.4% against the forecast of 3.6%, while the Average Hourly Earnings at the same time slowed down from 0.4% to 0.3% MoM and from 4.9% to 4.4% YoY, which turned out to be noticeably worse than the analysts' neutral forecasts.
On Friday, Japan released January data on business activity in the Services sector: the PMI rose from 51.1 points to 52.3 points, below the expected 52.4 points. The non-manufacturing sector continues to recover after the complete lifting of quarantine restrictions in the country and the opening of the borders of China, as a result of which household demand increased, and the influx of new tourists provided the service sector with increased profits. Tomorrow, investors will pay attention to the statistics on coinciding and leading indicators for December, as well as the speech of the Chair of the US Federal Reserve, Jerome Powell, who can comment on the unexpectedly strong data on the US labor market.
Bollinger Bands in D1 chart show moderate growth. The price range is expanding but it fails to conform to the surge of "bullish" sentiments at the moment. MACD indicator is growing, while preserving a rather stable buy signal (located above the signal line). Stochastic keeps its upward direction but is rapidly approaching its highs, which reflects the risks of overbought American dollar in the ultra-short term.
Resistance levels: 132.00, 133.00, 133.61, 134.50. | Support levels: 131.00, 130.00, 129.00, 128.00.
