The US Non-farm Payrolls data showed that only 136,000 jobs were added to the US economy, as against the 145,000 jobs that analysts had predicted. Furthermore, the unemployment rate dropped in a shock move to 3.5%, as against the 3.7% that markets had predicted.
A combination of lower numbers which did not meet the deviation target as well as the lower unemployment rate has produced a conflict which cannot be utilized for trading the USDJPY.
Subsequently, the daily candle USDJPY has gained mildly and is now holding at the neckline support price of 106.86.
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What Next for the USDJPY?
The neckline support still holds firm. Attention will now shift to the speech by Fed Chair Jerome Powell at a Fed Listens event hosted by the Federal Reserve, in Washington DC. There may be some comments that will make reference to today’s results. Hopefully, Powell may say a few things about monetary policy.
I still maintain the previous technical views outlined for the USDJPY. A break of the neckline to the south confirms the double top pattern on the daily chart. The measured move from such a break could terminate at the 105.25 price area (August 12/13 lows).
If the daily candle closes above the neckline, this postpones the completion of the potential double top and the bearish view will have to be reassessed. To the upside, the 50% Fibonacci level (double top area) at 108.40 remains the level to beat to invalidate the pattern and hence, the bearish outlook.