USD/JPY Pushes Below January Range Ahead of US NFP Report

US Dollar Outlook: USD/JPY

USD/JPY extends the decline from the start of the week to push below the January low (153.72), and the weakness in the exchange rate may persist over the remainder of the week as it starts to carve a series of lower highs and lows.

USD/JPY Pushes Below January Range Ahead of US NFP Report

USD/JPY trades to a fresh yearly low (152.12) as the ISM Services survey prints at 52.8 in January versus forecasts for a 54.3 reading, and the exchange rate may struggle to retain the advance from the December low (148.65) as it fails to hold within the January range.

Join David Song for the Weekly Fundamental Market Outlook webinar.

US Economic Calendar

In turn, a further decline in USD/JPY may push the Relative Strength Index (RSI) towards oversold territory, but data prints coming out of the US may continue to sway the exchange rate as the Non-Farm Payrolls (NFP) report is anticipated to show the economy adding 170K jobs in January.

In addition, the Unemployment Rate is anticipated to hold steady at 4.1% during the same period, and a positive development may lead to a bullish reaction in the US Dollar as it encourages the Federal Reserve to keep US interest rates on hold at its next meeting in March.

With that said, the recent selloff in USD/JPY may turn out to be temporary as the Federal Reserve pauses its rate-cutting cycle, but a weaker-than-expected NFP report may drag on the Greenback as it fuels speculation for lower US interest rates.

USD/JPY Price Chart – Daily

Chart Prepared by David Song, Senior Strategist; USD/JPY on TradingView

USD/JPY starts to carve a series of lower highs and lows as it no longer trades within the January range, with a breach below 151.95 (2022 high) raising the scope for a move towards the 148.70 (38.2% Fibonacci retracement) to 150.30 (61.8% Fibonacci extension) zone.
Failure to defend the December low (148.65) opens up the 144.60 (50% Fibonacci retracement) to 145.90 (50% Fibonacci extension) region, but lack of momentum to push below 151.95 (2022 high) may curb the bearish price series.
Need a close back above 153.80 (23.6% Fibonacci retracement) to bring the monthly high (155.89) on the radar, with a break/close above 156.50 (78.6% Fibonacci extension) opening up the January high (158.88).

Additional Market Outlooks

Gold Record High Price Pushes RSI Into Overbought Zone

US Dollar Forecast: AUD/USD Vulnerable amid Threat of Trade War

USD/CAD Clears 2020 High as Trump Tariff Looms

GBP/USD Holds Below 50-Day SMA Ahead of BoE Rate Decision

--- Written by David Song, Senior Strategist

Follow on Twitter at @DavidJSong

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.