USD/JPY builds on Wednesday’s gains, trades above 106.50 ahead of US data

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USD/JPY builds on Wednesday’s gains, trades above 106.50 ahead of US data

  • 10-year US T-bond yield continues to push higher on Wednesday.
  • US Dollar Index extends slide toward 98 handles.
  • ADP private-sector employment is expected to retreat to 149K in August.

The USD/JPY pair closed the previous day nearly 50 pips higher despite the broad USD weakness as the risk-on atmosphere made it difficult for the safe-haven JPY to find demand. With the market sentiment remaining upbeat on Thursday, the pair preserved its momentum and touched its highest level in two weeks at 106.75. As of writing, the pair was up 0.18% on a daily basis at 106.58.

Recovering sentiment lifts USD/JPY

The data from China earlier this week showed that the economic activity in August recovered at a more robust pace than expected with the Composite PMI rising to 51.6 from 50.9 in July. Additionally, the Chinese cabinet voiced its commitment to continue to support the economy and eased concerns over a slowdown in the world’s second-biggest economy and its potential negative impact on global growth.

The 10-year US Treasury bond yield, which slumped to its lowest level in three years earlier this week, closed the day in the positive territory yesterday and continued to push higher today to reflect the risk-appetite. At the moment, the 10-year T-bond yield is up 2.8% on the day.

Later in the day, the Automatic Data Processing (ADP) will publish its monthly private employment data. Ahead of this data, the US Dollar Index is losing 0.2% on the day at 98.20, suggesting that markets are pricing in an aggressive Federal Reserve move in September. Furthermore, the US economic docket will feature the IHS Markit’s and the ISM’s Services PMI reports.

Technical levels to watch for


Today last price 106.64
Today Daily Change 0.24
Today Daily Change % 0.23
Today daily open 106.4
Daily SMA20 106.14
Daily SMA50 107.22
Daily SMA100 108.42
Daily SMA200 109.62
Previous Daily High 106.45
Previous Daily Low 105.83
Previous Weekly High 106.68
Previous Weekly Low 104.45
Previous Monthly High 109.32
Previous Monthly Low 104.45
Daily Fibonacci 38.2% 106.21
Daily Fibonacci 61.8% 106.06
Daily Pivot Point S1 106
Daily Pivot Point S2 105.61
Daily Pivot Point S3 105.38
Daily Pivot Point R1 106.62
Daily Pivot Point R2 106.84
Daily Pivot Point R3 107.24
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