USD/JPY: Non-Farm Payrolls Surprise Sparks Dollar Rally
US Job Growth Soars, Dashes Rate Cut Hopes
The unexpectedly strong non-farm payrolls data released on Friday has reignited a rally in the US dollar for several reasons. The robust job growth of 353,000 in January, nearly double the expected figure, has instilled confidence in the strength of the US economy.
Positive Economic Outlook: The impressive job numbers signal a resilient and growing economy, which supports the attractiveness of the US dollar.
Reduced Rate Cut Expectations: The strong employment data has led investors to scale back expectations of an interest rate cut by the Federal Reserve. Prior to the report, there was a 37% expectation of a rate cut in March, but it dropped to 20% after the release.
Market Sentiment Shift: The market sentiment has shifted towards a more optimistic view of the US economy, prompting increased demand for the US dollar. This shift is reflected in the record high reached by the S&P 500 and the positive performance of tech stocks.
USD/JPY’s Bull Flag Breakout
Friday’s resurgent US dollar was perhaps most evident in USD/JPY which burst higher and broke out of a bull fag consolidation pattern which had formed during the last two weeks.
Interestingly, the market found support at the confluence of the volume-weighted average price’s (VWAP’s) anchored to the recent key inflection points. This was followed by a decisive break higher on Friday which has created a burst of bullish momentum that has the potential to reignite USD/JPY’s New Year rally.
USD/JPY Daily Candle Chart
Past performance is not a reliable indicator of future results
A Closer Look
Zooming into USD/JPY’s hourly candle chart, Friday’s non-farm momentum comes into sharp focus. However, the market has stalled following a retest of the January swing highs. For the breakout move to continue, the market needs to comfortably break and hold above the January highs during today’s session.
USD/JPY Hourly Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84.01% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
The unexpectedly strong non-farm payrolls data released on Friday has reignited a rally in the US dollar for several reasons. The robust job growth of 353,000 in January, nearly double the expected figure, has instilled confidence in the strength of the US economy.
Positive Economic Outlook: The impressive job numbers signal a resilient and growing economy, which supports the attractiveness of the US dollar.
Reduced Rate Cut Expectations: The strong employment data has led investors to scale back expectations of an interest rate cut by the Federal Reserve. Prior to the report, there was a 37% expectation of a rate cut in March, but it dropped to 20% after the release.
Market Sentiment Shift: The market sentiment has shifted towards a more optimistic view of the US economy, prompting increased demand for the US dollar. This shift is reflected in the record high reached by the S&P 500 and the positive performance of tech stocks.
USD/JPY’s Bull Flag Breakout
Friday’s resurgent US dollar was perhaps most evident in USD/JPY which burst higher and broke out of a bull fag consolidation pattern which had formed during the last two weeks.
Interestingly, the market found support at the confluence of the volume-weighted average price’s (VWAP’s) anchored to the recent key inflection points. This was followed by a decisive break higher on Friday which has created a burst of bullish momentum that has the potential to reignite USD/JPY’s New Year rally.
USD/JPY Daily Candle Chart
A Closer Look
Zooming into USD/JPY’s hourly candle chart, Friday’s non-farm momentum comes into sharp focus. However, the market has stalled following a retest of the January swing highs. For the breakout move to continue, the market needs to comfortably break and hold above the January highs during today’s session.
USD/JPY Hourly Candle Chart
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84.01% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.