USDJPY TECHS: Remains Below The 50-Day EMA

• RES 4: 164.08 High Jan 24  
• RES 3: 162.71 76.4% retracement of the Dec 30 - Feb 10 bear leg     
• RES 2: 162.49 High Jan 29
• RES 1: 160.88/161.19 50-day EMA / High Feb 13
• PRICE: 158.90 @ 06:52 GMT Feb 18
• SUP 1: 157.90/155.61 Low Feb 12 / 10 and the bear trigger 
• SUP 2: 155.15 Low Sep 16 ‘24
• SUP 3: 154.42 Low Aug 5 ‘24 and key medium-term support
• SUP 4: 153.87 Low Dec 14 ‘23  

EURJPY has pulled back from its recent high. For now, resistance at 160.88, the 50-day EMA, remains intact. It has been pierced, however, a clear break is required to strengthen a bullish condition and signal scope for an extension towards 162.71, a Fibonacci retracement. For bears, a stronger reversal would refocus attention on 155.61, the Feb 10 low and a bear trigger. Clearance of this level would resume the downtrend.

For our full UK labour market and CPI preview click here.

• Private sector regular (i.e. non-bonus) AWE remains the single most important print in the labour market release for us (despite being downplayed by a number of MPC members and questionability as it doesn’t seem that consistent with private surveys or the HMRC wage data). The Bank of England forecast Q4 to come in at 6.29%Y/Y and the MNI median looks for a similar 6.3% print.
• LFS data is getting increasingly less attention, too. The BOE forecast the unemployment rate at 4.45% for Q4 while the vast majority of the sellside previews that we have read look for 4.5%.
• With AHE data is also being questioned by the MPC, and LFS data reliability having been an issue for quite some time, the experimental joint ONS-HMRC PAYE data has become increasingly important. Using seasonally adjusted data, the -47k December total number of payrolled employees flash estimate showed the sharpest monthly drop in employees since November 2020. The data is, however, prone to revision (particularly for the flash estimate) and is quite noisy. We do a deep dive into this data in our preview. We have seen sellside estimates ranging from -30k to flat on the month here (partly varying due to expectations on revisions).
• Looking at the alternative HMRC RTI experimental data, median earnings rose 5.41%Y/Y in December.

• RES 4: 158.87 High Jan 10 and a bull trigger   
• RES 3: 156.75 High Jan 23 
• RES 2: 155.89 High Feb 3 
• RES 1: 154.24/80 50-day EMA and a pivot resistance / High Feb 12       
• PRICE: 152.00 @ 06:44 GMT Feb 18
• SUP 1: 150.93 Low Feb 07 and a bear trigger 
• SUP 2: 149.69 Low Dec 9 
• SUP 3: 148.65 Low Dec 3 ‘24 and a key support 
• SUP 4: 148.01 Low Oct 9 ‘24     

USDJPY continues to trade below the Feb 12 high. Recent weakness  highlights that - for now - a key resistance around the 50-day EMA, at 154.24, remains intact. A clear break of the EMA is required to confirm a stronger bullish reversal. This would open 155.89, the Feb 3 high. Key support and the bear trigger is unchanged at 150.93, the Feb 7 low. Clearance of this level would resume the bear cycle that started on Jan 10.