USD/JPY Aims Fresh Increase, NFP Report Next

Key Highlights

• USD/JPY started a decent increase from the 113.50 zone.
• It broke a crucial bearish trend line with resistance near 114.20 on the 4-hours chart.
• EUR/USD surged above 1.1350, and GBP/USD spiked above 1.3600.
• The US nonfarm payrolls could increase 150K in Jan 2022.

USD/JPY Technical Analysis

The US Dollar saw a major decline from the 116.35 zone against the Japanese Yen. USD/JPY traded below the 115.00 support to move into a bearish zone before the bulls appeared.

Looking at the 4-hours chart, the pair found support near the 113.50 zone. It seems like a double bottom pattern was formed near 113.50. The pair was able to climb above the 114.20 and 114.50 resistance levels.

There was also a break above a crucial bearish trend line with resistance near 114.20 on the same chart. The pair stabilized above the 114.50 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

An immediate resistance is near the 115.10 level. The first major resistance is near the 115.50 zone. A clear move above the 115.50 level might start a major increase in the coming sessions.

If there is no upside break above 115.50, the pair could start another decline. An immediate support is near the 114.50 level. The next major support is near the 114.10 level, below which the bears might aim a test of the 113.50 zone.

Fundamentally, the US ISM Services Index for Jan 2022 was released yesterday by the Institute for Supply Management (ISM). The market was looking for a decline from 62.0 to 59.5 in Jan 2022.

The actual result was near the forecast, as there was a drop in the US ISM Services Index to 59.9. The last reading was revised up from 62.0 to 62.3.

Looking at EUR/USD, the pair gained bullish momentum for a move above 1.1350. Similarly, GBP/USD was able to rally above the 1.3600 level.

Economic Releases

• US nonfarm payrolls for Jan 2022 – Forecast 150K, versus 199K previous.
• US Unemployment Rate for Jan 2022 – Forecast 3.9%, versus 3.9% previous.
• Canada’s Employment Change for Jan 2022– Forecast -117.5K, versus 54.7K previous.
• Canada’s Unemployment Rate for Jan 2022- Forecast 6.2%, versus 5.9% previous.