The USD JPY volatility increased sharply above 160.00 following a stronger-than-expected U.S. employment report. Nonfarm payrolls rose by 172,000 in May, surpassing the forecast of 85,000. Additionally, revisions added 93,000 jobs to the previous two months. The unemployment rate remained steady at 4.3%, average hourly earnings increased by 0.3% monthly and 3.4% yearly, while the participation rate held steady. These figures indicate a resilient U.S. labor market.
USD JPY Volatility and Key Levels
The USDJPY pair surged to 160.22, its highest since May 1, but stayed below the March 30 swing high at 160.446. Traders eye the 2026 high of 160.717 from April 30 as the next target. Despite gains above 160.00, caution persists due to potential official intervention risks, although no direct warnings have emerged from Japanese authorities. After a brief pullback, buyers returned, keeping 160.00 a critical level. Support lies at the 100-hour moving average of 159.856 and the 200-hour moving average of 159.601. A drop below these averages could weaken bullish momentum and shift the outlook downward. Until then, buyers maintain control with the path of least resistance upward.
EURUSD and GBPUSD Technical Pressure
The EURUSD is testing a key support zone between 1.1576 and 1.1587, with a low of 1.1584 reached. A sustained break below 1.1576 may increase bearish momentum and lead to further declines. The pair has fallen below hourly trendlines and is moving away from the 100-hour and 200-hour moving averages at 1.16225 and 1.16287, respectively. These averages now act as resistance, reinforcing the bearish bias. Sellers remain dominant, with the next test focusing on maintaining levels below 1.1576.
The GBPUSD continues to face selling pressure after failing to hold above key resistance near the 50% retracement at 1.34803 and the 100-day moving average at 1.34756. The pair has moved lower, distancing itself from the 100-hour and 200-hour moving averages near 1.3443. More notably, it slipped below the 200-day moving average at 1.34195, a level that has served as support and resistance recently. This move strengthens the bearish outlook. The next support levels are last week’s low at 1.33658 and the May 20 low at 1.33739. A break below these could deepen the decline. Buyers would need to push and sustain prices above the 200-day moving average to regain control.
US Treasury yields rose, with the two-year yield up nine basis points to 4.14% and the 10-year yield up six basis points to 4.54%. US stocks opened lower amid concerns over higher rates. The Dow industrial average edged up slightly, while the S&P 500 fell 0.71% and the NASDAQ dropped about 1.10%.
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