Despite Strong U.S. Employment Data, Caution Advised Regarding Further Downside Potential for the U.S. Dollar Against the Yen

Despite Strong U.S. Employment Data, Caution Advised Regarding Further Downside Potential for the U.S. Dollar Against the Yen

13.01.2025

Last weekend, the U.S. dollar rose immediately following the release of the U.S. December employment report on the 10th, as the unemployment rate fell from 4.2% the previous month to 4.1% and nonfarm payrolls came in at 256,000, exceeding market expectations of 164,000.The USD/JPY pair rose from 157.622 to 158.871. However, the momentum failed to hold, and the pair subsequently fell back to 157.231. Since the daily chart shows two consecutive days of decline, we should remain cautious regarding price movements during U.S. trading hours today.

Among European currencies, the pound was the weakest during U.S. trading hours. The GBP/USD pair fell from 1.2320 to 1.2192. The decline continued as the pair encountered resistance at the 20-period moving average on the hourly chart. On the 4-hour chart, the price has reached the -3σ level of the Bollinger Bands, and a similar price movement is observed on the daily chart. We will be closely monitoring price action during European trading hours to see if the pound continues to weaken against the U.S. dollar.

Today’s economic indicators include New Zealand housing permits at 6:45, China’s trade balance at 11:00, Sweden’s expected price trends at 14:30, Turkey’s current account balance at 16:00, the Czech Republic’s retail sales at 17:00, the Czech Republic’s current account balance at 18:00,India’s Consumer Price Index at 19:30, Canada’s Leading Economic Index at 20:00, the Philippines’ Current Account Balance at 22:00, the U.S. Employment Trends Index at 24:00, the U.S. 6-Month Treasury Bill Auction at 25:30, and the U.S. Budget Balance at 28:00. Despite strong U.S. employment data, the U.S. dollar has fallen against the yen, so we must remain highly vigilant regarding its downside potential.