The USDJPY is shedding gains made on the day after the Non-Farm Payrolls (NFP) data showed that 701,000 jobs were lost last month (versus consensus of -100K and the previous number of +273K), with the unemployment rate rising to 4.4% (versus consensus of 3.8% and the prior figure of 3.5%).
The abysmal NFP data is the first that has reflected the employment situation in the United States from when the coronavirus outbreak spread across the country in March 2020. Analysts and some members of the Fed have predicted that the unemployment numbers would surge as a result of the economic impact of the coronavirus pandemic. We may have started to see the first numbers play out.
The USDJPY spiked initially to 108.56 after the NFP data was released, but it is now trading lower in a choppy session of trading to 108.38 and looks set for a further dip as traders digest the numbers.
The pair is presently testing the 108.42 resistance level, formed by previous highs of 18 September and 1 October 2019, as well as 3 March and 13 March 2020. The NFP data may make it hard for the USDJPY to break above this price level. This move could open the door for a downside test of the 107.82 support level, with 107.03 forming another firm support below this area.
A break above the current resistance brings 109.30 and 109,70 into focus. The upper barrier of the symmetrical triangle rests at the 110.58 price level. A break of this price level to the upside also breaks the triangle and opens the pathway towards 111.94.