The USDJPY currency pair is recovering well as recessionary fears help the US Dollar regain some ground lost during the week ahead of the Nonfarm Payrolls (NFP) data tomorrow.
The release of the PMI reports during the week that showed that the US economy was cooling off faster than anticipated spooked the market as investors worried that the reports show signs that the world’s largest economy might be heading for a recession. The greenback looks to build on Wednesday’s trading session success as it continues to move away from the nine-week low achieved during the trading session. Even though the greenback is recovering, the USDJPY is currently trading 1.01% lower for the week open and is poised to reach the US unemployment data release in the red.
The 4H chart shows that the USDJPY currency pair, also known as the Gopher, would need to break above the 131.663 price level to target the resistance level at 132.217, a level of significance for the bulls. If the breakthrough above the initial level of significance is supported by increased volume, then the bulls could look to retest the resistance level of 133.014 around the golden ratio. The bullish rally could be confirmed if the price action substantially moves above the golden ratio.
However, if the 131.663 price level holds, the bears could look at the breakout below the 23.60% Fibonacci level at 130.940 as a confirmation of bearish sentiment. A breakout below the 23.60% Fibonacci level, supported by significant volume, would bring the 130.421 and 129.673 support levels into play.
The economic calendar shows that there will not be any major economic indicators in both economies that can weigh on the USDJPY currency pair during the trading session ahead of the US employment reports tomorrow. Nevertheless, the weekly jobless claims figures and the Fed Bullard Speech could look to drive trading for the currency pair during today’s trading session.
Sources: TradingView, Bloomberg, Investing.com.
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