• The greenback ignores rising US Treasury yields, with the 10-year hitting 1.785%.
  • US Nonfarm Payrolls report came at 199K, lower than estimations, unemployment rate dips under 4%.
  • USD/JPY Technical Outlook: Downward biased, unless it reclaims the 116.00 figure.

The USD/JPY fails to gain traction after a mixed US Nonfarm Payrolls report, trading under the 116.00 threshold during the New York session. At the time of writing, the USD/JPY is exchanging hands at 115.67. The market sentiment is downbeat, as witnessed by US equity indices trading in the red, after the US employment report showed that the labor market is tight, with unemployment falling but wages rising.

Nonfarm Payrolls fell short than expected, but the unemployment rate dipped below 4%

Before Wall Street opened, the US Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls rose by 199K, lower than the 400K median foreseen by economists. In the meantime, the Unemployment Rate fell to a 22-month low of 3.9% from 4.1% in the previous report. 
In 2021, the labor market improved, creating 6.4 million jobs. That is the largest increase in employment record-keeping in 1939. 
“January will paint a weaker picture, and the remaining months are in the hands of the latest COVID wave,” per analyst cited by Reuters.

December’s report was unlikely to reflect the impact of the fourth wave of the Covid-19, linked to the Omicron variant. The survey was done by mid-December, just as the newly discovered strain hit the US.

In the meantime, US Treasury yields keep skyrocketing, with the 10-year Treasury yield at 1.7850% up some five basis points in the day. Contrarily, the US Dollar Index, a greenback measurement against a basket of six peers, drops 0.40%, sitting at 95.93.

USD/JPY Price Forecast: Technical outlook

The USD/JPY 1-hour chart depicts the pair still has an upward bias, as long as the spot price remains above the 200-hour simple moving average (SMA), which lies at 115.43. On the downside, the first support would be the S1 daily pivot, tested two previous times in the day at 115.59, followed by the 200-hour SMA at 115.43, and then the S2 daily pivot at 115.33.

The US/JPY first resistance would be 116.00. A breach of the latter would expose the January 6 high at 116.18, followed by the January 4 cycle high at 116.34.

This article was originally published by Fxstreet.com.Read the original article here.

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