“¢ A subdued USD price action fails to assist build on overnight rebound.
“¢ Investors turn cautious ahead of the keenly watched US monthly jobs report.
The USD/JPY pair lacked any firm directional bias and oscillated in a narrow trading band, just above mid-111.00s, through the Asian session on Friday.
The US Dollar buying picked up the pace on Thursday and helped the pair to stall this week’s retracement slide from near two-week tops, levels beyond the 112.00 handle. This coupled with a smart recovery in the US equity markets weighed on the Japanese Yen’s safe-haven appeal and further collaborated to the pair’s rebound from intraday lows, around the 111.30 region.
The uptick, however, lacked any strong follow-through and was being capped by a subdued USD price action on the last trading day of the week. Investors also seemed to have turned cautious ahead of the keenly watched US monthly jobs report, due for release later during the early North-American session.
The headline NFP print and average hourly earnings would be looked upon to reaffirm market expectations for a gradual pace of the Fed monetary policy tightening. Against the backdrop of the Fed’s upbeat assessment of the US economy, an above-forecast reading should be enough to fuel the ongoing USD positive momentum and provide some fresh bullish impetus to the major.
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet writes: “What bulls need now is a convincing break above 112.15 (August 1 high). If confirmed, the spot will likely attack 113.17 (July 19 high).”
“On the downside, only a daily close below the 50-day MA would signal a short-term bullish-to-bearish trend change,” he added further.
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