It was a quiet morning for US dollar / Japanese yen. Japanese household spending figures attracted attention.
Household spending fell 2.4% in February versus an expected decline of 0.4%. In January, household spending jumped 2.7%. On a yearly basis, spending rose 1.6% versus 0.3% in January. Economists expect a rise of 4.3%.
According to the Statistics officeAnd
- Housing spending fell 12.1% year-on-year, with education spending falling 9.6%.
- Household spending on furniture and household items decreased by 9.1%, while spending on culture and entertainment increased by 18.6%.
While the household spending figures attracted attention, rising geopolitical tensions between the US and China will also need to be given some thought, although markets do not expect any retaliatory move from China.
USD/JPY price movement
This morning, USD/JPY was down 0.07%, at 131,672. A mixed start to the day saw USD/JPY climb to an early high of 131.927 before falling to 131.652.
USDJPY 070423 daily chart
USD/JPY needs to avoid pivot 131.480 to target the first major resistance level (R1) at 132.186. Return to 132 indicates a bullish session for USD/JPY. However, US economic indicators should support a breakout in USD/JPY.
Should the rally continue, the bulls are likely to test the second major resistance level (R2) at 132,607. The third major resistance level (R3) is located at 133,734.
A fall through the pivot will activate the first major support level (S1) at 131,059. However, barring the dollar sell-off, USD/JPY should avoid below 130. The second major support level (S2) at 130.353 should limit the downside. The third major support level (S3) is located at 129,226.
USDJPY 070423 hourly chart
Looking at the exponential moving averages and the 4-hour chart, the exponential moving averages are sending a bearish signal. The USD/JPY pair is below the 50-day moving average (131.990). The 50 day EMA has regressed back from the 200 day EMA, with the 100 day EMA regressing back from the 200 day EMA, giving bearish signals.
USD/JPY A move through the 50-day moving average (131.990) would support a breakout from R1 (132.186) to give the bulls a run at the 100-day moving average (132.364) and R2 (132.607). However, failure to move through the 50-day exponential moving average (131.990) would leave S1 (131.059) and sub-131 in sight. A move through the 50-day EMA could send a bullish signal.
USDJPY 070423 hourly chart
Looking at the US session, it’s an important day in the US Economic calendar. The very important US jobs report will be in focus.
Weaker-than-expected US job vacancies, ADP employment change, and weekly jobless claims numbers fueled expectations by lower numbers. However, economists expect an increase of 239k in non-farm payrolls and the unemployment rate to hold at 3.6%.
Overnight, FOMC member James Bullard spoke about viscous inflation and the need for the Fed to continue taking policy steps to bring inflation to target. The higher-than-expected numbers could fuel Fed bets for another rate hike.
Investors should watch the Fed’s talk about monetary policy and the US economy.
this condition Originally published on the FX Empire website
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