- Data revealed an acceleration in US job growth in November.
- There was a drop in the unemployment rate to 3.7%.
- There is speculation that the Bank of Japan may be nearing the end of its ultra-low interest rate policy.
An upbeat USD/JPI forecast set the tone for a bullish trip, fueled by a promising start to the dollar week. All eyes were on US inflation data and the Federal Reserve’s year-end policy meeting.
–Are you interested in learning more about ECN brokers? Check out our detailed guide-
The dollar strengthened on Friday after data showed US employment growth accelerated in November and the unemployment rate fell to 3.7%. Consequently, the report cast doubt on expectations of an upcoming Fed rate cut in the early months of next year.
Moreover, the dollar recovered against the yen, surpassing ¥145, reversing some of its significant decline against the Japanese currency since last week. There was speculation last week that the Bank of Japan may be nearing the end of its ultra-low interest rate policy.
Bank of Japan Governor Kazuo Ueda indicated on Thursday that the central bank will carefully assess the strength of domestic demand and the outlook for wages in the coming year when setting monetary policy.
The meeting between Ueda and Prime Minister Fumi Kishida was a routine exchange held quarterly. However, it came amid growing market expectations that the BOJ would soon emerge from years of ultra-low interest rates.
Furthermore, on Wednesday, Deputy Governor Riozo Jimino noted the potential economic impact of exiting ultra-loose monetary policy. Inflation has consistently exceeded the BOJ’s 2% target for more than a year. As a result, many market participants expect the massive stimulus to be phased out next year.
USD/JPI Key Events Today
Today, no major impact events are coming from the US or Japan. Therefore, traders will continue to digest the NFP report.
USD/JPI Technical Forecast: Strong resistance zone threatens recovery
The bias for USD/JPI on the charts is bearish. However, there was a big recovery from last week’s collapse. The price fell and touched support at 142.02 before recovering. Moreover, buyers have retraced more than 50% of the recent collapse, and the price is approaching the 30-SMA resistance.
–Are you interested in learning more about day trading brokers? Check out our detailed guide-
In addition, there is resistance from the key level of 146.50, the fib retracement level of 0.786 and the bearish resistance trend line. All these levels form a strong resistance zone that is likely to stop the bullish move. Therefore, the downtrend will continue if the bears return to this resistance zone.
Do you want to trade Forex now? Invest in eToro!
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing money.
