Will the Non-Farm Payrolls trigger a bearish push towards 105 for the USD/JPY?

March 06, 2020 09:30

Source: Economic Events March 6, 2020 - Admiral Markets' Forex Calendar

This past highly volatile week of trading, especially in US yields, is to finish with one of the most exciting trading news events among traders: the Non-Farm Payrolls.

Given the current bias among market participants, the risk-off mode and the anxious following of developments in the Coronavirus, the release of the Non-Farm Payrolls could trigger another round of volatility in US yields, particularly if numbers come in worse than expected, which could renew fears of a US recession.

After the "emergency rate cut" of 50 basis points by the Fed last Tuesday, the USD/JPY broke below 107.80/108.00 and went for a test of the region around 106.80/107.00.

It was the first "emergency rate cut" since October 2008, during the week when the Lehman Brothers Investment bank collapsed, and 10-year US Treasury yields dropped below 1.00% for the first time ever, pushing the USD/JPY dropped to its lowest levels since last October.

A disappointing print today (something significantly below 150,000) could trigger a next bearish wave, bringing the region around 106.80/107.00 under pressure.

If we get to see a sustainable break lower into the weekly close, such an move would activate the region around the 2019 yearly lows around 105.00 as a next target.

Short-term bounces, driven probably by a surprising solid print and bounce back in 10-year US yields, would find a potential stronger zone of resistance around 108.50/109.00:

Source: Admiral Markets MT5 with MT5-SE Add-on USD/JPY Daily chart (between December 26, 2018, to March 5, 2020). Accessed: March 5, 2020, at 10:00pm GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2015, the value of USDJPY increased by 0.5%, in 2016 it fell by 2.8%, in 2017 it fell by 3.6%, in 2018 it fell by 2.7%, in 2019 it fell by 0.85%, meaning that after five years, it was down by 9.2%.

Discover the world's #1 multi-asset platform

Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!

Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

  1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
  3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
  4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
  6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
  7. Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
  9. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.
Admirals An all-in-one solution for spending, investing, and managing your money

More than a broker, Admirals is a financial hub, offering a wide range of financial products and services. We make it possible to approach personal finance through an all-in-one solution for investing, spending, and managing money.