USD/JPY – Little Movement As Markets Await Non-Farm Payrolls

USD/JPY is showing little movement on Friday as the pair continues to trade close to the 105 line. In economic news, today’s sole Japanese release, Leading Indicators, met expectations. Over in the US, today’s highlight is the Non-Farm Employment Change. On Thursday, Unemployment Claims posted another strong reading and beat the estimate.

US Non-Farm Payrolls, one of the most important economic indicators, will be released later on Friday, and we could see some markets movement as a result. There had been concern that the indicator might sag towards the end of the year, but NFPs have looked strong. The past two readings have above the 200 thousand level and well above expectations. The markets are expecting another strong release, with the estimate standing at 196 thousand.    

It’s been an excellent start for US employment numbers in the new year. ADP Non-Farm Payrolls looked very sharp, as the key indicator climbed to 238 thousand, up from 215 thousand a month ago. This easily surpassed the estimate of 199 thousand. This was followed by another strong Unemployment Claims, which dipped to 330 thousand, beating the forecast. With another QE taper in January a strong possibility, every employment release will be under the market microscope and could impact on the currency markets.

USD/JPY for Friday, January 10, 2014

USD/JPY January 10 at 11:30 GMT

USD/JPY 104.98 H: 105.00 L: 104.78

USD/JPY Technical

• USD/JPY has posted slight gains in Friday trading. The pair edged higher in the Asian session and is trading close to the 105 line.
• 104.17 continues to provide strong support. This is followed by a support line at 103.30.
• On the upside, there is resistance at 105.70. This is followed by a resistance line at 106.85, which has remained intact since September 2008.
• Current range: 104.17 to 105.70

Further levels in both directions:

• Below: 104.17, 103.30, 102.53, 101.19 and 100.00
• Above: 105.70, 106.85, 107.73 and 108.77

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in short positions in Friday trading. This is not reflected in what we are seeing from the pair, as the dollar has posted slight gains. Long positions have a majority in the USD/JPY ratio, indicating trader bias towards the dollar continuing to move higher.

The pair is hugging the 105 line in Friday trading. The US will release Non-Farm Payrolls later in the day, and if the reading is not in line with market expectations, we could see some volatility from USD/JPY.

USD/JPY Fundamentals

• 5:00 Japanese Leading Indicators. Estimate 110.9%. Actual 110.9%.
• 13:30 US Non-Farm Employment Change. Estimate 196K.
• 13:30 US Unemployment Rate. Estimate 7.0%.
• 15:30 US Average Hourly Earnings. Estimate 0.2%.
• 15:00 US IBD/TIPP Economic Optimism. Estimate 45.3 points.
• 15:00 US Wholesale Inventories. Estimate 0.4%.

*Key releases are highlighted in bold

*All release times are GMT

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