USD/JPY on fresh five-week lows after ADP employment report

dollar_yenUS dollar plunged to the lowest point in five weeks against the Japanese yen on Wednesday, after a report by ADP showed that US private sector added fewer than projected job positions in September, as this raised concerns over the pace of economic recovery.

USD/JPY slid to a session low at 97.22 at 12:26 GMT, the pairs lowest point since August 7th, after which consolidation followed at 97.36, falling 0.66% for the day. Support was likely to be found at August 7th low, 96.30, while resistance was to be received at current session high, 98.08.

According to data by Automatic Data Processing Inc. (ADP) employment in the United States increased slightly in the month of September, as the private sector added 166 000 new job positions, which remained below expectations of 175 000 new jobs. ADP revised down Augusts result to 159 000 new jobs from 176 000 previously. Usually this report is used as a signal, regarding the official data, released two days later. However, due to the partial government shutdown in the United States, the official report on employment in the private sector may not be published on Friday this week. As a result, market players might pay greater attention to the data, released by ADP today.

Before the release of the report on employment, the greenback came under selling pressure, as concerns appeared that the first US government shutdown in 17 years may pose a threat to economic recovery and this could urge the Federal Reserve Bank to maintain the pace of its Quantitative Easing for a longer period than expected.

Meanwhile, the Japanese currency was still higher against the euro, as EUR/JPY cross retreated 0.16% on a daily basis to trade at 132.36 at 13:25 GMT. GBP/JPY was losing 0.42% to trade at 158.09 at 13:27 GMT.

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