Usdjpy declines 1.56% to 145.87 amid mixed economic signals

USDJPY Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	-1.56%	-231.5 Pips
Week to-date	-2.49%	-372.5 Pips
April	-2.68%	-402.099 Pips

Upcoming key events (London Time)

Fri 01:30 PM USD Nonfarm Payroll Employment
Fri 01:30 PM USD Average Hourly Earnings (12-mth)
Fri 04:25 PM USD Federal Reserve Chair Jerome Powell speech

What happened lately

In the United States, the labor market seems to show resilience, with initial unemployment claims dropping to 219,000 in the week ending March 29, compared to the previous data point of 225,000 as reported by the Department of Labor. This decline suggests a strengthening labor market with fewer individuals filing for unemployment benefits. However, there was less favorable news from the manufacturing sector, as new orders for manufactured goods in February decreased to 0.6%, following a revised January figure of 1.7%, down from the originally reported 1.8%, indicating a slowdown in manufacturing activity as per the Census Bureau reports.

The USDJPY currency pair saw a notable decline on Thursday, dropping by 1.56% to 145.87. This move could be influenced by a combination of factors, including the decrease in U.S. manufacturing orders which may signify a broader economic slowdown or reduced investor confidence, possibly leading to a weaker U.S. dollar. In contrast, the improvement in unemployment claims may provide some support to the dollar, offering a mixed outlook. Markets remain keenly focused on upcoming U.S. economic events such as the nonfarm payroll employment report, average hourly earnings data, and a speech from Federal Reserve Chair Jerome Powell. These releases hold significant potential to provide new insights on economic health and monetary policy direction, which could further influence USDJPY movement. Overall, the prospect of economic fluctuations and policy discussions implies USDJPY could experience heightened volatility in response to these influential events.

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What can we expect from USDJPY today?

USDJPY on Thursday dropped -1.56% to 145.87. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for USDJPY looks bearish as the pair posted lower in Thursday trading session.

Looking ahead for the day, immediate support level is at 144.59 (S1) with break below could see further selling pressure towards 143.31 (S2). To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 148.34 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 145.18 would indicate selling pressure.

For the week to-date, take note that USDJPY is bearish as the pair posted lower by -2.49%.

Key levels to watch out: