The UD has turned bearish again this week and it continued to slide lower in European trading today, even if the market mood is seemingly more tentative. This pair fell to fresh lows since mid-August as the price declined below 134.00, with sellers threatening to push below August lows.

But, the US non-farm payroll numbers as well as earnings were quite positive for November. That improved the sentiment for the USD immediately, with the terminal top rate from the FED increasing again. Although, the surge stalled at around 136 and we decided to open a sell USD/JPY signal after the doji candlesticks which are bearish reversing signals and our trade just closed in profit as the price started to reverse back down.

US November Non-Farm Payrolls

• November non-farm payrolls +263K vs +200K expected
• October NFP was +261K, revised up to 284K
• Unemployment rate 3.7% vs 3.7% expected
• Prior unemployment rate 3.7%
• Participation rate 62.1% vs 62.2% prior (was 63.4% pre-pandemic)
• U6 underemployment rate 6.7% vs 6.8% prior
• Average hourly earnings +0.6% m/m vs +0.3% expected (prior +0.4%, revised to +0.5%)
• Average hourly earnings +5.1% y/y vs +4.6% expected (prior +4.7%)
• Average weekly hours 34.4 vs 34.5 expected
• Change in private payrolls +221K vs +190K expected
• Change in manufacturing payrolls +14K vs +20K expected
• Household survey -186K vs -306K prior
• Full report

USD/JPY was trading at 134.06 just before the data and has shot to 135.83 afterward as part of a broad USD rebound. The wages number is a concern and could stoke second-round effects on inflation. The terminal FED funds top has moved up to 4.97% from 4.90% yesterday.

USD/JPY Live Chart