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  • The USD/JPY has bounced off nicely from the 200-hour EMA in the last couple of hours despite the drop in the treasury yields.
  • Risk-on action in equities may have saved the day for the USD/JPY bulls.
  • On the hourly chart, the pair is teasing a falling wedge breakout. If confirmed, the outlook would turn bullish ahead of the payrolls release.

Currently, the USD/JPY pair is trading at 111.82 – up 0.20 percent on the day – having defended the support of the 200-hour exponential moving average (EMA) earlier today.

The pair has bounced off the key average, despite the overnight drop in the treasury yields – the 10-year fell four basis points to 3.13 percent and was last seen at 3.14 percent.

The pair’s resilience to falling yields could be associated with the risk-on action in the equities. The American stocks picked up a bid yesterday, possibly due to positive remarks from President Trump on US-China trade relations. The US President reportedly said yesterday that trade discussions are moving along nicely. Further, Trump was out on the wires a few minutes before press time, informing markets that China’s Xi also wants to make a fair trade deal.

More importantly, Asian stocks are also reporting an improved risk appetite. For instance, Japan’s Nikkei is up 1.4 percent. Meanwhile, stocks in South Korea have added 1.8 percent.

Further, the pair is charted a falling wedge pattern on the hourly chart and is currently trading above the upper edge of the wedge. A bull breakout would be confirmed if the current hourly candle closes 112.76, in which case, the doors would open for a convincing move above 113.00 ahead of the US non-farm payrolls and wage growth release.

The data, due at 12:30 GMT, could show that the economy added 200K jobs in October.

USD/JPY Technical Levels

USD/JPY

Overview:
       Last Price:  112.83
       Daily change:  12  pips
       Daily change:  0.106%
       Daily Open:  112.71
Trends:
       Daily SMA20:  112.55
       Daily SMA50:  112.3
       Daily SMA100:  111.67
       Daily SMA200:  109.91
Levels:
       Daily High:  113.06
       Daily Low:  112.6
       Weekly High:  112.9
       Weekly Low:  111.38
       Monthly High:  114.56
       Monthly Low:  111.38
       Daily Fibonacci 38.2%:  112.77
       Daily Fibonacci 61.8%:  112.88
       Daily Pivot Point S1:  112.52
       Daily Pivot Point S2:  112.32
       Daily Pivot Point S3:  112.05
       Daily Pivot Point R1:  112.98
       Daily Pivot Point R2:  113.26
       Daily Pivot Point R3:  113.45