- The dollar ignores the rise in US Treasury yields, with the 10-year yield hitting 1,785%.
- The US Non-Farm Payroll report hit 199,000, disappointing estimates, the unemployment rate falls below 4%.
- USD / JPY Technical Outlook: Biased lower, unless it recovers to 116.00.
The USD/JPY fails to gain traction after a mixed US nonfarm payroll report, trading below the 116.00 level during the American session. At the time of writing, USD / JPY is hovering around 115.67. Market sentiment is pessimistic, as evidenced by US stock indices trading in the red, after the US employment report showed the labor market is tight, with unemployment declining but wages rising.
Nonfarm payrolls were worse than expected, but the unemployment rate fell below 4%
Before the opening of Wall Street, the US Bureau of Labor Statistics (BLS) reported that non-farm payrolls increased by 199,000, well below the 400,000 expected by economists. Meanwhile, the Unemployment Rate fell to a 22-month low of 3.9% from 4.1% in the previous report.
In 2021, the job market improved, creating 6.4 million jobs. That’s the biggest increase in employment record keeping in 1939.
“January paints a weaker outlook, and the remaining months are in the hands of the latest wave of COVID,” according to an analyst quoted by Reuters.
The December report is unlikely to reflect the impact of the fourth wave of Covid-19, linked to the Omicron variant. The survey was conducted in mid-December, just as the newly discovered strain arrived in the US.
Meanwhile, US Treasury yields continue to skyrocket, with the 10-year Treasury yield at 1.7850% climbing five basis points on the day. In contrast, the US dollar index, a measure of the dollar against a basket of six pairs, falls 0.40%, standing at 95.93.
USD / JPY Price Forecast: Technical Outlook
The USD / JPY 1-hour chart shows that the pair still has a bullish bias, as long as the spot price remains above the 200 hourly SMA, which is located at 115.43. On the downside, the first support would be the S1 daily pivot, tested twice earlier in the day at 115.59, followed by the 200 hourly SMA at 115.43, and then the S2 daily pivot at 115.33.
The first resistance USD / JPY would be 116.00. A break to the downside of the latter would expose the January 6 high at 116.18, followed by the January 4 cycle high at 116.34.
Technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
