Daily Analysis USDJPY - 4 Aug 2023

The Bank of Japan (BoJ) has raised concerns about its exit from the record low-interest rate and Yield Curve Control (YCC) policy due to its two unscheduled bond-buying programs and the defense of the easy-money policy. In the US, July nonfarm payrolls are anticipated to increase by 200,000, while unemployment is expected to remain at 3.6% and average hourly earnings are projected to rise by 0.3% m/m and 4.2% y/y. A strong ADP employment report on Wednesday showed a surge of 324,000 private sector jobs in July. Today's NFP data will be crucial for the currency pair, with data surpassing 200,000 being favorable for the dollar and US yields, leading to an increase in the price. Conversely, if the data falls below expectations, it may have an inverse effect.

USDJPY's price action on the Hourly chart indicates a potential double top pattern, suggesting a likely reversal. The next potential support level is expected to be around 142.00. If a breakout occurs to the downside, the price could move towards 141.50, whereas an upward breakout would encounter the next resistance at 144.00.