USD/JPY Spikes Higher as US Dollar Gains on Solid NFP Report
US DOLLAR OUTLOOK: USD/JPY STRONGER ON BIG NONFARM PAYROLLS BEAT
- USD/JPY jumped 25-pips higher immediately following the release of nonfarm payrolls
- US Dollar is broadly stronger with the help from a better-than-expected NFP report
- NFPs showed 943K jobs gained in July and the unemployment rate falling to 5.4%
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The US Dollar is trading on its front foot this morning as traders digest the latest round of monthly nonfarm payrolls. Headline NFPs for July came in at 943K and topped the consensus forecast of 870K. The unemployment rate crossed the wires at 5.4%, which was also better than the 5.7% figure expected by markets. US Dollar strength following the NFP report likely corresponds with markets pricing in greater odds of an expedited Fed taper timeline and Treasury yields moving higher across the curve.
USD/JPY PRICE CHART: DAILY TIME FRAME (19 MARCH TO 06 AUGUST 2021)
USD/JPY price action spiked 25-pips higher immediately after the NFP report release and is eyeing a topside breakout from its falling wedge pattern. Potential for USD/JPY strength was hinted at earlier this week with the bullish engulfing candlestick printed on Wednesday. A close above the upper descending trendline could provide confirmation of the recent reversal higher by USD/JPY and bring July highs back into focus for US Dollar bulls. This scenario might warrant more credence if we continue to see upward pressure on Treasury yields given the strong positive relationship between USD/JPY and interest rates.
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