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USDJPY Trading in a Local Downtrend

12/7/2022 12:08 PM

The yen slightly lost its position against the US dollar due to yesterday's statistics on the labor market in Japan, which allowed the USD/JPY pair to correct to the area of 137.27.

Thus, the average salary compared to 2021 added only 1.8%, while last month, it increased by 2.1%, and analysts predicted a continuation of the positive trend to 2.0%. The Household Expenditure Index slowed to 1.1% in October from 1.8% a month earlier, which led to a decrease in the annual rate to 1.2% from 2.3% in the previous period, while the total income of employees in the form of wages increased by 1.8%, down from 2.2% a month earlier.

The US dollar corrects around 105.500 in the USD Index as traders refrain from trading in anticipation of the report on the labor market, which will be published on Thursday. Monday's data were contradictory, and if the number of applications for unemployment benefits is above 225.0K, it will confirm the negative dynamics of the sector and affect the national currency negatively. Today will be released statistics on labor costs: analysts expect a decline to 3.1% from 3.5% earlier.

On the daily chart, the trading instrument is moving in a local downward corridor.

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.

Support levels: 135.50, 131.40. | Resistance levels: 138.90, 142.20.

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