USDJPY Holding At Neckline Support as Non-farm Payrolls Data is Mixed
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.
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.