USD/JPY and a Run at 134 in the Hands of the US JOLTs Job Openings

It was a quiet morning for the USD/JPY. There were no economic indicators for investors to consider this morning.

The lack of stats left investors to consider the possible effects of OPEC’s unexpected cut in output on Fed policy and respond to the US economic indicators from Monday.

In March, the ISM Manufacturing PMI fell from 47.7 to 46.3. Sub-components of the PMI drew interest, with the employment sub-index sliding from 49.1 to 46.9 and the prices sub-index falling from 51.3 to 49.2. The numbers were dollar negative and could be early signs of a shift in the US economy.

USD/JPY Price Action

This morning, the USD/JPY was up 0.26% to 132.715. A mixed start to the day saw the USD/JPY fall to an early low of 132.168 before rising to a high of 132.821.

Technical Indicators

The USD/JPY needs to move through the 132.777 pivot to target the First Major Resistance Level (R1) at 133.353 and the Monday high of 133.756. A return to 133 would signal a bullish USD/JPY session. However, US economic indicators have to support a USD/JPY breakout.

In case of an extended rally, the bulls would likely test resistance at 134 but fall short of the Second Major Resistance Level (R2) at 134.333. The Third Major Resistance Level (R3) sits at 135.889.

Failure to move through the pivot would leave the First Major Support Level (S1) at 131.797 in play. However, barring another dollar sell-off, the USD/JPY pair should avoid sub-131.50 and the Second Major Support Level (S2) at 131.221. The Third Major Support Level (S3) sits at 129.665.

Looking at the EMAs and the 4-hourly chart, the EMAs send a bullish signal. The USD/JPY sits above the 100-day EMA (132.670). The 50-day EMA narrowed to the 100-day EMA, with the 100-day EMA closing in on the 200-day EMA, delivering bullish signals.

A USD/JPY move through the 200-day EMA (133.032) would support a breakout from R1 (133.353) to give the bulls a run at 134 and R2 (134.333). However, a fall through the 100-day (132.670) and 50-day (132.380) EMAs would bring S1 (131.797) into play. A fall through the 50-day EMA would send a bullish signal.

The US Session

Looking ahead to the US session, it is a relatively busy day on the US economic calendar.

The US JOLTs Job Openings report and factory orders will be in focus. However, barring a sharp decline in factory orders, the JOLTs Job Openings report should have more impact ahead of the ADP nonfarm employment change (Wed) and US Jobs Report (Fri).

Investors should also monitor Fed chatter on monetary policy and the US economy.