Employers in the U.S. probably created enough jobs last month to keep wages growing and the unemployment rate unchanged, economists said before a government report today. The projected 125,000 increase in payrolls is based on the median estimate of 81 economists surveyed by Bloomberg News and would follow a 157,000 gain in May. The jobless rate is forecast to hold at 4.5 percent for a third month, near a six-year low.
Wage gains are giving consumers the means to cope with near-record gasoline prices and declining home values, keeping spending and the economy expanding into the second half of the year. The Federal Reserve remains concerned a low unemployment rate and rising labor costs will lead to higher prices, one reason policy makers aren't convinced inflation has been tamed.
``Job expansion is continuing at a pace that will keep income and spending on a moderate growth path,'' said Douglas Lee, president of Economics from Washington, a private consulting firm in Potomac, Maryland.
The Labor Department is due to issue the report at 8:30 a.m. in Washington. The payroll estimates ranged from gains of 85,000 to 155,000. The economy has added 133,000 jobs a month on average this year, down from 189,000 in 2006.
Forecasts for the unemployment rate ranged from 4.4 percent to 4.6 percent. Because fewer people are entering the labor force than in previous years, smaller payroll gains are needed to keep the rate stable, economists said.
The unemployment rate has ranged between 4.4 percent, a six-year low, and 4.6 percent since September.


The following technical analysis gives us a detailed lookout on what is expected to happen to the pair.

The buying point of USD/JPY is at 123.15; based on strong demand and continuation on the uptrend.

- Previous resistance and Fibonacci 61.8% is the take profit at 123.51
- Fibonacci retracement 23.6% represents the stop loss at 122.49

To strengthen our analysis; we use many other indicators, starting with MACD (Moving Averages convergence divergence); we notice the crossing of the two moving averages below the zero line, the shorter term moving average is faster than the long term and break the zero line moving upwards. In order to find the power of the market, we use RSI (Relative Strength Index).With RSI, we can determine that the market try to break the 70% line.

The momentum oscillator is very important to understand the strength of the market and as we see on the graph; it break the zero line. The Stochastic oscillator breaks 20% line and moving upwards. Most of the indicators show us the strength of the USD against the Japanese Yen.

* The following analysis is for information only; Finotec is not responsible for any
decisions or misinterpretations based on the given text.

By Finotec’s professional analyst,
Tony B.

dealingdesk@finotec.com