US Jobs Report (NFP) is now key ahead of the mid-December FOMC meeting. The US dollar continues to make fresh multi-month lows against a range of other currencies with USD/JPY now down just over 12% from its October 24 multi-decade high.
The latest leg lower, fueled by comments from Fed chair Jerome Powell on Wednesday and a benign core PCE reading on Thursday, may not be over yet with the latest US Jobs Report (NFP) set for release at 13:30 GMT today.
This report, already a known market mover, now takes on increasing significance after Wednesday’s ADP report showed a sharp slowdown in private job growth. While any correlation between ADP and NFP is always up for debate, a slowdown in today’s NFP report will add to the belief that the Fed’s aggressive rate hikes this year are now starting to crimp the jobs market.
USD/JPY has taken out a previous area of support over the last two days and is now testing the 200-day moving average. The violent break below 137.70 now changes this level to initial resistance and with the pair currently trading around 134.20, this resistance is unlikely to be troubled in the short term.
The next area of support is seen around 130.00 to 131.58 and again this should hold in the short term, barring any shock NFP number.