FxWirePro: USD/JPY extends sideways grind above 21-EMA support, investors await US NFP data

Chart – Courtesy Trading View 

USD/JPY was trading 0.21% lower on the day at 147.94 at around 04:25 GMT, technical outlook remains bullish. The pair is extending sideways above 21-EMA support, cautious optimism prevails ahead of the all-important US jobs report. US economy is expected to have added 200k jobs in October vs. the prior release of 263k. Also, the Unemployment Rate is seen higher at 3.6%.

Data Released (Thursday):

– US ISM Services PMI for October dropped to 54.4 from 56.7 prior and 55.5 market consensus. 

– The Factory Orders matched 0.3% forecast versus 0.2% upwardly revised previous readings. 

– The US S&P Global Composite PMI and Services PMI got an upward revision from their preliminary readings for the stated month 

– The Initial Jobless Claims eased to 217K for the week ended on October 28 versus 220K expected and 218K prior. 

– US inflation expectations, as per the 10-year and 5-year breakeven inflation rates per the St. Louis Federal Reserve (FRED) data, dropped to the lowest levels since October 19 and 13 in that order.

Technical Analysis: 

– USD/JPY trades above cloud and major moving averages which are trending higher

– GMMA indicator shows major trend is bullish

– Bearish RSI divergence keeps scope for some downside

– Stochs and RSI are biased lower and volatility is low

Major Support Levels: 

S1: 147.31 (21-EMA)

S2: 145.42 (Lower BB)

Major Resistance Levels: 

R1: 149

R2: 150.37 (Upper BB)

Summary: USD/JPY pivotal at 21-EMA support, bias bullish as long as pair holds above. Decisive break below will see change in near-term trend.

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