- The yen traded near a one-month high on Thursday on safe-haven demand.
- The U.S. JOLT jobs report revealed fewer than expected job openings at 7.67 million.
- Investors will be interested to see the state of job growth and unemployment in the US.
The USD/JPI outlook points to an increase in bullish momentum for the yen as investors flee risk assets after more dovish US data. Meanwhile, the dollar fell after collapsing amid increasing bets on a significant Fed rate cut in September.
–Are you interested in learning more about day trading brokers? Check out our detailed guide-
The yen traded near a one-month high on Thursday as safe-haven demand for the Japanese currency rose. This growth came after US employment data pointed to weakness in the labor market. The JOLT job creation report revealed fewer than expected job vacancies at 7.67 million.
Demand in the labor market is slowing, raising fears of an impending recession. At the same time, expectations for a 50 bps rate cut are rising. Historically, significant Fed rate cuts have come before recessions. A sharp downturn in the economy is forcing policymakers to quickly cut borrowing costs.
Consequently, when expectations of interest rate cuts rise, investors panic. Furthermore, they are ditching risky assets and buying safer ones like the yen. This is causing a lot of turmoil in the market.
On Friday, investors will be interested to see the state of job growth and unemployment in the US. If there is more evidence of deterioration, the yen could continue to rise. However, market turmoil may cloud the outlook for a BoJ rate hike. Meanwhile, the dollar could suffer as bets on a rate cut rise. At this point, investors are estimating 110 basis points of easing by the end of the year.
USD/JPI Key Events Today
- ADP Change in employment excluding agriculture
- Claims for the unemployed
- ISM services PMI
USD/JPI technical outlook: Bears will attack 142.03 support
On the technical side, the price of USD/JPI broke below the support level of 144.00 and made a new low. The bias is bearish as the price has fallen well below the 30-SMA. At the same time, the RSI fell into the oversold region, indicating an increase in bearish momentum.
–Are you interested in learning more about automated trading? Check out our detailed guide-
Bears took control near the key resistance level of 147.00. Since then, price action has favored the bearish side, with small bullish candles. The downtrend is likely to continue until the next support at 142.03. However, the price could retest the 144.00 level or the SMA before the decline.
Do you want to trade Forex now? Invest in eToro!
67% 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.
