US Labor Statistics for May Is in the Spotlight

The greenback shows a negative trend against its main competitors. The dollar index (#DX) has reached three-month lows. Demand for risky assets has grown significantly amid the gradual lifting of restrictions and hopes for a global economic recovery worldwide. The US currency is under pressure due to mass protests and disorders throughout the United States. Financial market participants also monitor the further development of the conflict between Washington and Beijing.

dx-finviz-2020-06-04
Source: finviz.com

Currently, investors have taken a wait-and-see attitude before the publication of the US labor market report for May on Friday, June 05. These statistics may have an impact on the further alignment of forces on currency majors.

Recent reports from the US were ambiguous. Preliminary data from ADP indicated a decrease in the number of people employed in the country's nonfarm sector by 2760K, which is significantly higher than the forecasted value of -9000K. ISM non-manufacturing PMI rose to 45.4 from 41.8. At the same time, the consumer confidence index counted to 86.6 compared to market expectations of 88.0.

us-nonfarm-2020-06-04
Source: tradingeconomics.com

Experts expect a rather pessimistic report on the labor market: the number of people employed in the US nonfarm sector will decrease by 8 million; the growth in average hourly earnings will slow down from 4.7% (m/m) to 1.0% (m/m); the unemployment rate will increase from 14.7% to 19.8%. We recommend paying attention to the difference between the actual and forecasted values.

Let's consider the current technical pattern on the USD/JPY currency pair

  • Support levels: 108.70, 108.40, 107.90
  • Resistance levels: 109.15, 109.50, 110.00
  • mn-2020-06-04

    The bullish sentiment prevails on the USD/JPY currency pair. At the moment, the trading instrument is stable. USD/JPY quotes are consolidating. The local support and resistance levels are 108.70 and 109.15, respectively. Indicators signal the power of buyers:

    • - The price has fixed above 100 MA;
    • - The MACD histogram is in the positive zone.

    Nevertheless, we recommend opening positions from key levels.

    If the price fixes above 109.15, we expect further growth of USD/JPY quotes. The movement is tending to the round level of 110.00.

    An alternative could be a decrease in the USD/JPY currency pair to 108.40-108.00.

    When following positions, we recommend using a trailing stop.

    by JustForex, 2020.06.05

    This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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