After rejecting off the resistance area of 110.20-60 with a daily close last week, USD/JPY is currently showing some bearish pressure towards recent support level of 108.50. Due to the worse-than-expected report on the US labor market released on Friday, Average Earning Index was published with a decreased value at 0.1% from the previous value of 0.3% which was expected to be at 0.2%, Non-Farm Employment Change also showed significant decrease to 156k from the previous figure of 189k which was expected to be at 180k, Unemployment Rate report was published with an increase to 4.4% which was expected to be unchanged at 4.3%. However, ISM Manufacturing PMI report was the only high impact economic event which turned out to be positive at 58.8 from the previous figure of 56.3 which was expected to have a slight increase to 56.5. Today USD started with a good amount of gains to recover the GAP it opened with but failed to sustain the gain till now for lack of market pressure due to Labor Day observance holiday. On the other hand, JPY had Monetary Base report published today showed an increase to 16.3% which was expected to be unchanged at 15.6%. To sum up, due to downbeat economic reports from the US, JPY is currently expected to have an upper hand with the gains and it is expected to sustain in the coming days until the US comes up with a high impact positive economic reports to counter it.
Now let us look at the technical chart. The pair started the day with a GAP lower which was retested to the dynamic level of 20 EMA. The price is expected to reach 108.50 support level in the coming days as the price remains below the resistance area of 110.20-60. Though the pair has been residing in a corrective and volatile structure recently, the bearish pressure is observed to be quite dominant which is expected to lead to further bearish pressure.
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