Trade USDJPY on the Non-Farm Payroll Data Release

FX Traders are eagerly anticipating the release of key US employment data on the first Friday of the year this week. Most are happy that we are back to normal procedure with the Non-Farm Payrolls being released as usual on a Friday after a few months of disruption due to the US government shutdown last year. This data set has the propensity to move markets even more strongly this time out, as there will be a lot more faith in the data as the Bureau of Labour Statistics is back to normal running and markets are acknowledging the importance that the FOMC is giving to the jobs market.

The market is expecting that the headline Non-Farm Employment Change number will show an increase of around 60k with the Average Hourly Earnings data set to show a month-on-month increase of 0.3% – up from 0.1% last time out. Last months surprise was the Unemployment Rate pushing higher to 4.6%, but it is expected to drop back to 4.5% this month. Traders are expecting that any deviation of +/- 20k for the headline figure and a 0.1% change from the Unemployment Rate will see sharp moves in the market.

USDJPY is shaping up for one of the best trading opportunities on the data as it is sitting on key technical levels that should see exacerbated moves on the data release. It is currently sitting close to strong trendline support on the daily chart and any weaker data should see a clean break and open the way for a move back towards December lows and the next support levels under 154.00. Stronger numbers would see the dollar appreciate and should see the pair swiftly challenge the resistance trendline around 157.60 with a break there likely to see a longer-term target up near 160.00.

Resistance 2: 161.99 – July 2024 High

Resistance 1: 157.65 – Trendline Resistance

Support 1: 156.44 – Trendline Support

Support 2: 153.60 – Long-Term Trendline Support

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