USDJPY Declines Further on Disappointing NFP Data

USDJPY fell sharply, down 1% in immediate reaction to US jobs data, after July’s Nonfarm Payrolls (NFP) came in well below expectations at 114K versus the forecasted 176K, with June’s figure revised down to 179K from the initial 206K.

Unemployment unexpectedly rose to 4.3% in July from 4.1% in June, against the consensus. Meanwhile, average earnings increased by 0.2% last month, compared to 0.3% in June and the same forecast.

Weaker-than-expected labor data, with a significant drop in Nonfarm payrolls, added to the negative outlook and boosted dovish signals from the Fed. This strongly increased expectations for a 50bp cut in September, up from the initial 25bp, and lifted projections for 2024 cuts to 110bp.

The pair extended further below the broken 150 mark and fell beneath the pivotal Fibo support at 148.54 (61.8% of 140.25/161.95), hitting the lowest level since mid-March at 147.01 in post-NFP trading. A weekly close below 150 would confirm the negative signal.

Bears are now targeting 146.48 (Mar 8/11 higher base) and could extend towards 145.37 (Fibo 76.4%), though some consolidation is likely as daily studies are oversold.

Any upticks should be capped under the 150 level (now resistance), guarding the 200DMA at 151.65.

Res: 148.54; 150.00; 150.80; 151.65
Sup: 147.01; 146.48; 145.89; 145.37