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USD/JPY Off Session Lows, FOMC Minutes Awaited

The USD/JPY has bounced off session lows at 135.06 after the JOLTS Job Openings report indicated that the number of job openings decreased from 11.68 million (an upward revision) to 11.25 million, according to the US Bureau of Labor Statistics. This indicates that employment in the US is rising and puts the US Dollar in good stead heading into this evening’s FOMC minutes release and Friday’s key jobs report. 

The US Dollar has seen late demand within the New York Session after being offered in the early London session. This was more of a profit-taking effect, followed by traders seeing new entry opportunities. 

Technically speaking, the pair shows an evolving triple top formation, which could point to a near-term correction before the uptrend resumes. This is conditional and depends on the market fundamentals for the rest of the week. 

USD/JPY Outlook

The Investingcube S-R indicator has set the Sell entry for the pair at 136.03. However, the triple top pattern indicates that the current neckline at 135.065 is the price to beat for the bears. Therefore, a better trade for the bears may be to wait for a breakdown of this neckline to complete the pattern.

This opens the door for a measured move that targets the 132.359 support level. This move needs to break down the intervening support level at 134.421 for the measured move to attain completion. Additional downside targets are found at 132.359 (7 June and 17 June lows) and at 131.446 (16 June low).

On the other hand, a contrarian move will likely come from a bounce on the neckline support, targeting the resistance level formed by the tops at 137.00. Above this level, the bulls would be looking for a potential move to the 137.92 price level, which is the 0.27 Fibonacci extension level. This also coincides with the indicator’s stop-out level.