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Forex pairs in this Article » USD/JPY (Athens) – The USD/JPY is heading lower after the US initial jobless claims release, proved to be slightly weaker than expected but it is logically much worse as it doesn’t reflect the more than 800.000 workers furloughed due to government’s shutdown.

USD/JPY under pressure as initial jobless claims become more baffling than ever

The USD/JPY was hovering around 97.65 before the release of the US labor data, but after the data released across the board at a slightly weaker level, the cross started to move downwards, as the greenback got under renewed pressure across the board. We could consider that the real fact that the American dollar got under pressure, dragging down the pair almost 10 pips nearly 97.55 area, was not that the initial jobless claims increased by 1000 to a seasonally adjusted 308.000 in the week ended as of the 28th September. The careful reader should see behind the curtains; the figure released by the Labor Department has a lot of drawbacks.

After California, Nevada it’s now the 800,000 not included in data

First of all, it doesn’t conclude the more than 800.000 workers furloughed due to government’s shutdown. What’s more, Federal furloughs won't show up in forthcoming claims data, according to the US Department of Labor. Finally, we should take for granted that anyhow the data is distorted enough not only because does not include the furloughed workers but also due to the fact that the 4-week moving average of claims includes the weeks when California and Nevada underreported claims due to the computer system upgrades. On the other hand, Fed officials would well see the 800,000 furloughed workers more as a “temporary layoff”, therefore it will not influence their decision on the debt-ceiling.

Technical Outlook on the USD/JPY

Emmanuel Ng of OCBC Bank, suggests “that with the pair is under considerable downside pressure. Having punctured the 98.00 level convincingly, the next support of consequence is only expected towards the 200-day MA (96.58). Structurally, the USD is expected to remain laden on the back of the fiscal impasse while any deterioration in global risk appetite levels may also weigh on the JPY-crosses.”
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