JOLTS came out at +7 449M in April, which is worse than the previous result of +7 474M. The United States labor market is quite tight. Pay attention to the latest data on Nonfarm Payrolls in May, which is +75K.
Picture 1. JOLTS job openings
It means that there is no other possible way for the US monetary authorities to act than to decrease the interest rate. Analysts say the market expects the Fed to decrease the rate by at least 75 b.p. Consequently, the price of US dollar has already taken this into account. In this case, the pressure on the American national currency, which we mentioned in our review on June 4, may start gradually disappearing.
On the other hand, when speaking about the USD/JPY pair, we should always take into consideration the US-China relationship. The risks of a trade war may easily spread panic among traders, which will lead to sell-offs of the yen.
In our previous review of USD/JPY we mentioned the possibility that the pair could reach the 108,640 level. It happened on June 10. But we are still optimistic about the currency. Let’s look at its technical features again.
On a daily time frame the USD/JPY pair is trying to break the 9-EMA. The classical divergence on the MACD confirms the reversal pattern. The MACD lines are really close, which hints at the reversal. The RSI also returned from the oversold zone.
If the pair succeeds in breaking the 23,6% Fibo correction level – the next target will become the trend line (109). After that the upward movement may continue till the 109.566 level.
Picture 2. USD/JPY. 1D TF
Summary: It is possible to open longs if the pair breaks 108.897.