Market participants are likely to keep a close eye on the movement of the USD/JPY pair, which fell following the release of U.S. employment data.

Market participants are likely to keep a close eye on the movement of the USD/JPY pair, which fell following the release of U.S. employment data.

07.08.2023

Last weekend, the U.S. dollar continued to fall against the yen following the release of the U.S. July employment report on Friday, the 4th, which showed nonfarm payrolls of 187,000—below the market forecast of 199,000.The USD/JPY pair fell by approximately 130 pips from 142.889 to 141.549, breaking below the key support level of 142 yen that had been closely watched recently. However, on the short-term hourly chart, the 200-day SMA is acting as a support line, so we will be watching closely to see if the US dollar can stage a recovery during European trading hours.

European currencies saw the euro trade in a tight range against the yen after June retail sales data for the eurozone, released last weekend, showed an improvement year-on-year, moving from a 2.9% decline in the previous month to a 1.4% decline.EUR/JPY traded within a narrow range between 155.927 and 156.610, with the 200-period simple moving average (SMA) on the hourly chart acting as support. Technically, EUR/JPY is positioned just below the 20-period moving average (MA) on the daily chart, creating a volatile environment where the pair could move in either direction; therefore, we should carefully monitor price movements during U.S. trading hours.

Today’s schedule includes Japan’s Economic Sentiment Index at 2:00 PM, Switzerland’s Employment Statistics at 2:45 PM, Germany’s Industrial Production at 3:00 PM, the UK’s Halifax House Price Index, South Africa’s Foreign Exchange Reserves,Norway’s Manufacturing Production at 17:30, the Eurozone Investor Sentiment Index at 21:00, remarks by Fed Governor Bowman and Atlanta Fed President Bostic at 21:30, remarks by MPC member Pill at 25:00, and U.S. Consumer Credit at 28:00.We will closely monitor the movement of USD/JPY, which fell following the U.S. employment report.