- A late USD rebound on Thursday helped the pair to build on this week’s up-move.
- Technical buying above 106.75 supply zone aggravated the move on Thursday.
- Investors turned cautious ahead of Friday’s US jobs report/Powell’s speech.
The USD/JPY pair extended its consolidative price action through the Asian session on Friday and remained well within the striking distance of one-month tops set in the previous session.
Against the backdrop of optimism over the resumption of the US-China trade negotiations, which weighed on the Japanese Yen’s safe-haven status, a late US Dollar rebound helped the pair to add to this week’s positive move and finally break through the 106.70-75 heavy supply zone.
Upbeat US data/surging US bond yields underpinned the USD
Meanwhile, a strong intraday upsurge in the US Treasury bond yields, supported by a fresh wave of global risk-on mood and Thursday’s upbeat US economic releases, helped ease the recent bearish pressure surrounding the USD and stall its recent pullback from multi-year tops.
Data released on Thursday showed that the US private-sector employers added 195K jobs in August – the highest reading in five months – and was followed by upbeat ISM non-manufacturing PMI, which surpassed optimistic estimates and jumped to 56.4 in August from 53.7 previous.
The pair took along some stops being placed near the mentioned hurdle and spiked to an intraday high level of 107.23 – the highest since early-August, albeit lacked any strong follow-through as investors seemed reluctant to place aggressive bullish bets ahead of Friday’s key release of the US monthly jobs report.
Apart from the closely watched NFP data, investors on Friday will also confront the Fed Chair Jerome Powell’s scheduled speech, which will be closely scrutinized for clues about the central bank’s near-term policy outlook and eventually help determine the pair’s next leg of a directional move.
Technical levels to watch
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