General analysis USDJPY for 08.03.2022
Current Dynamics
The pair is recovering this week, having consolidated above the strong resistance level of 115.25.
US unemployment fell to 3.8%, non-farm payrolls for February was 678K, well above the forecast of 400K. Despite the strength of the labor market, the pair rallied during the jobs report. The reason is the lack of growth in US hourly payrolls on February, amid intensifying price pressures. In annual terms the figure has slowed down to 5.1%. It is a little strange to see such a trend given the rising labour costs in the USA each month. The number of US workers collecting unemployment benefits rose to 1.476m, while the number of initial jobless claims amounted to 215k, better than predicted by 11k. Also worth noting that the value of Non-Farm Supply Managers' Index was at 56.5 while experts expected a bigger increase to 61.0.
Meanwhile in Japan mixed data was released on the labour market. While the ratio of job openings to job applicants (1.2) indicated a labor shortage, the country's unemployment rate rose from 2.7% to 2.8%.
Meanwhile, Economy, Trade and Industry Minister Koichi Hagiuda told reporters on Friday that he had decided to sell 7.5 million barrels of oil from national stocks. Japan also plans to spend 360 billion yen (about $3.1 billion) to stabilise prices of petrol and other oil products in the country. At the same time as the problems in the energy sector, Japan fears supply disruptions in case it joins sanctions and closes the skies to aircraft from Russia. The sanctions already in place against Russia have resulted in Japan being placed on the list of unfriendly countries. All transactions between Japan and Russia will now be approved by a legal commission, which could hamper trade and have a negative impact on the country's trade balance. Japan's balance of payments data released today confirms the emerging risks.
Tomorrow at 02:50 (GMT+2) the Japanese GDP data will be released. Experts expect Q4 GDP growth of 1.4% and year-on-year growth of 5.6%. At 17:00(GMT+2), the U.S. jobs openings data for January will be released.
Support and resistance levels.
The news factor contributed to the sharp fall of the pair, below the 50 Fibonacci level. After the market renewed the local low, the quotes returned to the upside, crossing the 76.4 Fibonacci level. The current trend is upward. RSI is strengthening in the upper range, gently approaching the 70 zone.
- Support levels: 113.47, 114,15, 114.56, 114.90, 115.24
- Resistance levels: 115.66,116.34, 117.10, 118.05
Trading scenarios
- Long positions can be opened from the current level with a target of 117.10 and stop loss of 115.24. Implementation period: 1-3 days
- Short positions can be opened below the level of 115.24 with a target of 114.56 and a stop loss of 115.66. Implementation period: 1-3 days