Traders are expecting to see more volatility in the FX markets today with the release of the latest key employment data from the US. The market is even more heavily focused on this data, as the Fed has indicated how closely it is monitoring job numbers in this easing cycle, and today’s figures could dramatically change interest rate cut expectations. The expectation is for the headline Non-Farm number to show an increase of 147,000 jobs, with the unemployment rate remaining steady at 4.2%, and average hourly earnings increasing by 0.3% month-on-month. Any significant deviation from these results could lead to a sharp movement in the dollar.
The USD/JPY pair has had a very volatile week, as interest rate differential expectations have changed dramatically with the new Japanese Prime Minister. Traders are anticipating big moves in the pair on the data release if expectations shift again from the US side of the equation. The pair has seen a nearly 4% rise from base to peak in the last week, opening the way for further significant movements today, as it sits just beneath recent monthly highs ahead of the data. Resistance is around the 147.25 level, and a stronger number from the US could push the pair into fresh higher ranges, whereas another lower print, like last month’s, could swiftly undo all the work that has been done this week.
Resistance 2: 149.41 – August High
Resistance 1: 147.25 – October High and Trendline Resistance
Support 1: 144.32 – 200-Day Moving Average
Support 2: 142.50 – Trendline Support
