As with the first Friday of every month, today’s attention will be focused on the release of the US Non-Farm Payrolls (NFP) and Unemployment Rate data.  

During his speech at the Jackson Hole symposium, Fed Chairman Jerome Powell stated that the final stretch of 2021 may be the right time to start tapering by gradually reducing the asset purchase programme, with interest rates remaining untouched for the time being. Therefore, today’s unemployment data is very important. If the data is better than expected, then the Fed may choose to begin the process of tapering at their meeting later in September.  

During yesterday's session, US jobless claims were better than was expected by the market consensus, coming in at 340,000 claims versus an anticipated 345,000. This represents a decrease of 14,000 claims from last week.  

Today's NFP is expected to come in at 750,000 jobs, after the figure of 943,000 jobs was reached last month. If today's figure is better than expected, it would be the third consecutive month this has occurred, as we can see in the chart below:  

Source: Investing.com 

During today's session, we have also learned that the Japanese Prime Minister, Yoshihide Suga, has not only resigned from office, but has also withdrawn himself from running in the next election. Yoshihide Suga has been widely criticised in Japan for his handling of the pandemic and is stepping down one year after replacing the popular Shinzo Abe following his resignation for health concerns.  

Despite the political instability that this entails in the land of the rising sun, the Prime Minister's resignation has been very well received by the markets, with the Nikkei index rising by 2.05% during today's session.  

If we look at the daily chart of the Nikkei, we can see that, as a result of this strong rally, the price has been able to break above its medium-term trend line which started at the highs of February - where the price started a sideways movement between the lower red band and the aforementioned trend line.  

In the last few weeks, we have observed how the price has been supported on successive occasions at this support level and at its 200-session moving average, until finally making this last upward movement which has led it to break upwards. This movement could trigger a new upward drive that could be reinforced by the bullish crossover of its short and medium-term moving averages. Although, as we can see in the chart, the price has several resistance levels to break before being able to reach annual highs.  

It will be very interesting to see if the price performs a pullback, because, if after retesting its previous resistance level it manages to continue with the rebound, the new bullish impulse would have a higher chance of success. 

(Click on image to enlarge)

Depicted: Admirals MetaTrader 5 – JP225 Daily Chart. Date Range: 27 June 2020 – 3 September 2021. Date Captured: 3 September 2021. Past performance is not a reliable indicator of future results. 

Evolution of the last five years: 

• 2020: 16.01% 
• 2019: 18.20% 
• 2018: -12.08% 
• 2017: 19.10% 
• 2016: 0.42%