- The dollar weakens during the American session but keeps its gains against the JPY.
- USD / JPY down but still down for the week, negative outlook.
USD / JPY is once again approaching daily highs after finding support around 106.40. The pair peaked earlier after the US session started and after the US employment report at 106.71, the highest level in three days.
The spectacular figures of the April NFP were expected by market players. The greenback rose slightly, but then went down. The US economy has lost 20.5 million jobs, the worst report ever. Still, traders continue to focus on the future which does not look bright at the moment. “As tragic as that number is, it is not surprising that more than 26 million people applied for unemployment benefits between the March job survey and the April survey. Unfortunately, there will be more job losses reported when the May report is released next month, as an additional seven million people have subsequently applied for unemployment benefits, “said analysts at Wells Fargo.
Wall Street indices were higher on Friday, extending weekly gains. The relaxation of lockout restrictions around the world has boosted risk appetite. The yen was particularly affected by some optimism on Thursday and Friday, reducing gains against most of its rivals.
The US dollar index is up for the week, but off the highs. It reversed Thursday from weekly highs amid growing expectations of negative Federal Reserve rates. It is below 99.70, in the middle of the range of the last thirty days.
USD / JPY: weekly chart shows that bearish bias is intact
The dollar is about to register the fourth consecutive weekly decline. USD / JPY found support at 106.00 and rebounded. The weekly chart continues to be biased downward, and a slide below 106.00 would keep the road open for 105.00.
On the other hand, the USD / JPY will likely face resistance at 107.50. A close above 20-WMA, currently at 108.60, would remove the downward pressure.