For two days in a row, the price of the USD/JPY currency pair is moving amid an upward rebound with gains, towards the 139.90 resistance level. This is closest to breaching the psychological resistance 140.00 again, which I confirm is important for executing strong buying deals to change the pair's bearish direction recently. Strong US job numbers or not will determine the fate of the US dollar against the rest of the other major currencies. US jobs fell in October, reversing a surprise jump in the previous month, in a hopeful signal for the Federal Reserve as it seeks to curb demand across the economy. The number of available jobs fell to 10.3 million in October from 10.7 million in the previous month, the Labor Department's Job Opportunities and Employment Turnover Survey, or JOLTS, showed on Wednesday. The number is roughly in line with the median estimate in a Bloomberg survey of economists.
The report notes that demand for workers, while still strong, is declining amid a gloomy economic outlook and rising interest rates. However, many employers still struggle to fill vacancies. Workforce participation is stuck below pre-pandemic levels, and companies continue to raise wages to attract and retain workers.
Economic Uncertainty
The ongoing mismatch in supply and demand could persist for some time, leading many economists to predict that companies will be overstaffed even as consumer spending declines. It appears that the economic uncertainty coupled with recent layoff announcements at many large companies has made Americans more reluctant to leave their current roles. The job abandonment rate, a measure of volunteer job leaving as a share of total employment, fell to 2.6 percent, the lowest level since May 2021. About 4 million Americans left their jobs in October.
The employment opportunity ratio for the unemployed fell to 1.7 in October, which was the lowest level in a year. That compares to about 1.9 in September. In general, Fed officials watch this ratio closely and point to the rising number of job vacancies as a reason why the central bank can calm the labor market - and thus inflation - without a subsequent rise in unemployment. The data precedes Friday's monthly US jobs report, which is currently expected to show US employers added 200,000 workers to payrolls in November. Economists expect the unemployment rate to hold steady at 3.7 percent and average hourly earnings to moderate. A separate report earlier on Wednesday showed that US companies added 127,000 jobs this month, the lowest number since January 2021, according to data from the ADP Research Institute in collaboration with the Digital Economy Lab at Stanford.
Dollar expectations against the Japanese yen today:
- The penetration of the USD/JPY currency pair price against the 140.00 psychological resistance level will remain important for the bulls to start controlling the direction.
- It may support technical buying deals for the currency pair, and thus the penetration of stronger bullish levels.
- This enables the general view of the pair to change to bullish after a look.
- Bearish dominated performance throughout the past month.
- I still prefer to buy USDJPY from every downside level.
The closest levels of support for the dollar are currently 138.80 and 137.90, respectively. The US Federal Reserve's preferred inflation reading today will have a reaction to the US dollar's recent gains.
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