USDJPY Daily Outlook The US dollar remains under pressure against the Japanese yen as investors assess the overall economic picture ahead of key economic data releases. Friday’s highly anticipated Non-Farm Payrolls (NFP) report will be the focus of attention this week, but market participants will also be watching the ISM Non-Manufacturing Purchasing Managers’ Index on Wednesday. This is particularly notable given the weaker-than-expected survey of construction activity released on Monday. Rising geopolitical and trade tensions are adding to global uncertainty as investors await signs that the Federal Reserve may tighten its monetary policy stance. Futures markets are looking increasingly dovish, and the dollar’s appeal in futures trading could diminish as interest rates are expected to fall three times by the end of the year. Analysts expect payrolls to rise by 160,000 in February (up from 143,000 in January). However, the unemployment rate is expected to remain stable at 4.0%, and average hourly earnings are expected to rise at 4.1%. Any deviation from this expectation could have a significant impact on USDJPY|. Strong employment growth would provide some relief to the dollar and support the argument that the labor market is strong despite economic woes. Conversely, a disappointing report could fuel aggressive rate cut speculation and put downward pressure on the currency pair. The extent to which private sector jobs offset federal layoffs will be a key factor in determining whether the dollar rebounds or continues its downward trend. From a technical perspective, USDJPY is within a clear downtrend channel, with price action following both upward and downward trends. The currency pair is struggling to move above the key resistance level of 150.00, which indicates continued selling pressure at higher levels. The support zone at 149.00 is a key focus on Friday and has been tested several times in recent sessions. A clear break below this level could accelerate the decline and draw attention to the 147.00-147.50 support area. If sellers manage to push prices below this level, the decline could continue towards the 145.50 level, where strong buying interest is expected. Indicators suggest that the bearish trend will persist, although a short-term correction is likely. The Relative Strength Index (RSI) is currently at 41.57, indicating that the pair has not yet entered the oversold zone, but there is still downward pressure. The fact that the oscillator is likely to move even in the neutral zone of 46.17 indicates that a catalyst is needed for a more pronounced directional move. Looking at the Bollinger Bands, volatility has decreased and prices are approaching the lower band, which confirms our cautious approach. From a broader perspective, USDJPY will remain weak unless there is a fundamental change that supports the dollar’s recovery. The descending channel at 150.30 needs a break above the upper trendline to consolidate the current decline and open up the possibility of a retest of 151.00. However, if the downward pressure persists, the pair is expected to remain within its current range as investors await confirmation from key economic data. As the week progresses, the next major move for USDJPY will be determined by the relationship between US labor market data and Fed interest rate expectations.
