Maroun Saliba- June 5th 2023 at 1:00 PM GMT
On Friday the NFP data was released beating the market expectations by far (339K vs 190K expected) and supported the USD bulls where DXY closed on Friday with +0.46% and today its trading with +0.22% gains as of the time of writing. The data implied that the Fed still has room to raise rates. In the same time the Fedwatch tool is still pricing 70% possibility that the Fed will leave the policy rate unchanged at the upcoming meeting. The US 10 Year Yields closed on Friday with +2.7% and today its trading with more than 1% gains for the day as of the time of writing.
After the NFP data on Friday and Pr. J. Biden signing the Debt Ceiling bill on Saturday the US10 Year Yields opened today with a gap after a bullish close on Friday. Fundamental and technical analysis align for a probable bullish continuation in the US10YY weighing on the Japanese Yen and the precious metals as well. Together with a strong DXY makes the bulls of USDJPY stand out.
Today the ISM Services data will be released reflecting the services economic situation in the USA. Shall the Services data beats expectations, it will add momentum to the USD bulls implying a better situation for another rate hike in the upcoming Fed’s meeting. However, a miss of expectations could cause a short-term pullback and may extend to a significant correction.
On the technical level, Today USDJPY broke out above 140.070 (Fridays High) Retested it on the 1hr time frame making it the Breakout level for the bullish continuation. On the daily time frame USDJPY has formed a swing low and 140.070 price level plays the role of the breakout level on the Daily time frame as well turning it to a possible first support level followed by Thursday’s High at 139.950 which if firmly broken will trigger a deeper correction however establishing a floor in the fore mentioned potential support zone will signal a continuation towards Las Monday’s High at 140.918
