The USD/JPY passed the resistance level of the weekly R2 at the 110.516 mark to surge towards the 61.80% Fibonacci retracement level.
In general, the surge could continue as high as the 110.80 level, if it resumes. On the other hand the pair might retrace back down to the support levels near the 110.15 level.
The Bureau of Labor Statistics released Non-Farm Employment Change data better-than-expected of 304K compared to forecast 165K. Note, that the Average Hourly Earnings and the Unemployment Rate were released at the same time with the Non-Farm Employment Change.
The U.S. Bureau of Labor Statistics reported on Friday: "The labor force participation rate, at 63.2 percent, and the employment-population ratio, at 60.7 percent, changed little over the month; both measures were up by 0.5 percentage point over the year."
US data releases will affect the USD/JPY
This week will be busy for macroeconomic data releases. With the exception of Tuesday, on each day there is a notable data release.On Tuesday the heads of Bank of England and the US Federal Reserve spoke publicly. UK's Governor Carney spoke at 13:00 GMT and the head of the Federal Reserve Jerome Powell spoke at 17:45 GMT.
On Wednesday, at 09:30 GMT the UK CPI will be released. Later on at 13:30 GMT the US CPI and Core CPI will be released.
On Thursday, at 13:30 GMT the US Retail Sales and Core Retail Sales data will be published. In addition, at the same time the US Producers Price Index will be released.
The week will be closed by a UK data release. Namely, the UK Retail Sales data will be published at 09:30 GMT.
All of these events are scheduled to be covered by Dukascopy Analytics on our Dukascopy Webinars YouTube channel. The streams start ten minutes before the data release.
For more information watch the weekly Calendar Analysis stream recording.
USD/JPY short term daily review
During the previous trading session, the rate was testing the weekly R2 at 110.51. During Wednesday's midnight hours, the weekly R2 supported the currency exchange rate at the 110.70 mark.It is expected that the US Dollar will continue appreciating against the Japanese Yen to break the resistance of the 61.80% Fibonacci retracement level at 110.77.
Moreover, today's US CPI and Core CPI data release at 13:30 GMT will support the US Dollar to end the trading session at the 110.80 level.
Hourly Chart
On the daily chart the USD/JPY has finally reached the simple moving averages.On Tuesday the pair touched the 55-day simple moving average, which was located at the time at 110.60.
Meanwhile, note that the 100-day SMA was located far above the rate at 111.70, and the 200-day SMA was at 111.24.
Daily chart
On Wednesday, USD/JPY traders on the Swiss Foreign Exchange were short. The sentiment had become 52% short.
Meanwhile, trader set up pending orders - stop losses, take profits and position open orders in the 100-pip range were almost neutral. 54% of orders were set to sell in that range.
It seems that traders have taken profit at the 110.50 mark, and their opinion on the future has become divided.