USD/JPY Forecast: The Key Points to Look At Ahead of the Jobs Numbers

The USD/JPY pair started an upward rally on Tuesday last week when the pair found support at the 109.3 level. The recent rally saw the pair reach the weekly high of 111.13 on Tuesday before it started losing some of the gains. Today, as more American traders come to the market after yesterday’s holiday, and as traders wait for the employment numbers and minutes from the Fed, the pair is likely to see some major movements. Yesterday, it traded in a sideways direction as American markets remained closed.

Today, the focus will be on the jobs numbers, Federal reserve, and the trade news. In the afternoon, Automatic Data Processor (ADP) will release the number of people employed in the private sector in May. The number is watched closely by traders because it gives them an indication of what to expect when the final reading is released tomorrow. Traders expect the ADP numbers to show that 190K people were employed, which will be higher than the last month’s 176K.

Traders will also watch out for the jobless claims which will be released by the Department of Labor. Traders expect the number of initial jobless claims to rise to 231K and the continuing jobless claims to increase to 1720K.

Another data they will watch out for will be the non-manufacturing PMIs from the Institute of Supplies Management (ISM). In this, traders expect the non-manufacturing PMI to ease to 58.3 from last month’s 58.6.

The USD/JPY pair has reached 110.60, which is little moved from where it closed yesterday. As shown below, the current price is an important resistance area and is at the middle level of the Bollinger Bands. Today, the pair will likely move higher or lower. If the former happens, traders should expect it to test the resistance level of 111.16 and if it moves lower, markets will expect it to test the support level of 110.15.

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