USDJPY to 110?

USDJPY to 110?

The week kicked off with renewed losses for USD/JPY. Although pending home sales increased more than expected, the Chicago PMI index fell sharply, reminding everyone about the troubles plaguing the U.S. economy. The Fed intends to raise interest rates but data still doesn’t support their views and in order for that sentiment to change, Friday’s non-farm payrolls report needs to be exceptionally strong. Whether that’s true or not remains to be seen but traders will be skeptical up until the last moment before payrolls are released. For this reason, USD/JPY is eyeing 110, a level that could be broken ahead of the jobs report. Personal income, spending and the ISM manufacturing index are scheduled for release on Tuesday but none of these reports are significant enough to change the market’s views for December tightening – only Friday’s jobs number is capable of doing and even that is questionable. Technically, having broken below all of the major moving averages, USD/JPY looks prime for a test of 110, a level that we believe could break ahead of NFP. As long as the pair remains below 112.20, the downtrend remains intact

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