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USD/JPY Retreats after Disappointing US NFP

Today, the main fundamental release for the USD is the US Non-Farm Payroll Employment Change number for July, which came in at 215K, a tad lower than the average forecast of around 222K. The June reading was revised up to 231K from 223K.

For the USD/JPY, this was a non-bullish event, and perhaps a slightly bearish one. To me, the data is not that disappointing especially since we saw average hourly earnings up 0.2% in July after registering 0.0% in June. However, as the saying goes, the market is always right, and the market is bearish on the USD/JPY at least in the very near-term.

USD/JPY 1H Chart 8/7

(click to enlarge)

In the 1H USD/JPY chart, we can see that the initial reaction was a whiplash that eventually completed a double top and is pushing towards 124.00. 123.95-124 is a key support area, and if USD/JPY can close above this level this week and at the start of the next week, it should still maintain a bullish outlook in the medium-term, though the short-term mode has become flat. 

If price closes below 123.90 however puts the 123.00 pivot in sight and holds off the medium-term bullish outlook. Instead, we might still be in a medium-term sideways market, with messy short-term outlooks. At that point I would say on the sideline for more price action and clues to develop.