Key Highlights
- USD/JPY recovered above the 108.50 and 109.00 resistance levels.
- It is now facing a strong resistance near the 109.65 region.
- EUR/USD managed to stay above 1.2000, GBP/USD is still struggling above 1.3920.
- The US nonfarm payrolls could increase 978K in April 2021, up from 916K.
USD/JPY Technical Analysis
After a steady decline, the US Dollar found support near 107.50 against the Japanese Yen. USD/JPY started a fresh increase and surpassed the 108.00 resistance zone.
Looking at the 4-hours chart, the pair gained pace after it cleared a connecting bearish trend line at 108.25. As a result, there was a break above the 108.50 level and the 100 simple moving average (red, 4-hours).
The pair climbed above the 50% Fib retracement level of the key decline from the 110.96 high to 107.47 low. It even broke the 109.20 resistance and the 200 simple moving average (green, 4-hours).
However, the pair seems to be facing a major resistance near the 109.65 region. It is close to the 61.8% Fib retracement level of the key decline from the 110.96 high to 107.47 low.
A successful close above the 109.65 level could open the doors for a break above the 110.00 level. In the stated case, USD/JPY may possibly rise towards the 110.50 level. If not, there is a risk of a fresh decline towards the 108.50 level or the 100 SMA. The next major support could be 108.00.
Looking at EUR/USD, the bulls managed to defend the main 1.2000 support zone. Besides, GBP/USD is still struggling to gain bullish momentum above the 1.3920 and 1.3940 levels.
Economic Releases
- US nonfarm payrolls for April 2021 – Forecast 978K, versus 916K previous.
- US Unemployment Rate for April 2021 – Forecast 5.8%, versus 6% previous.
- Canada’s Net Employment Change for April 2021 – Forecast -175K, versus 303.1K previous.
- Canada’s Unemployment Rate for April 2021 – Forecast 7.8%, versus 7.5% previous.
