“¢ The overnight slide in the US equities kept a lid on the post-FOMC recovery move.
“¢ The USD held on to its mildly positive tone but failed to provide any fresh impetus.
“¢ Traders opt to stay on the sidelines ahead of today’s important release of NFP report.
The USD/JPY pair lacked any firm directional bias and seesawed between tepid gains/minor losses through the Asian session on Friday.
The pair added to the post-FOMC rebound from the 111.00 neighbourhood, or three-week lows, and gained some positive traction on Thursday amid a follow-through US Dollar uptick. The positive move got an additional boost from positive US Treasury bond yields, though a weaker tone around the US equity markets underpinned the Japanese Yen’s safe-haven demand and kept a lid on any runaway rally.
The USD held on to its mildly positive tone through the Asian session on Friday, albeit failed to provide any fresh bullish impetus to the major, which now seems to have stabilized and was seen oscillating in a narrow trading band as investors awaited the upcoming release of the closely watched US monthly – popularly known as NFP, for some fresh directional impetus.
The US economy is expected to have added 185K new jobs in April and the unemployment rate is seen holding steady at 3.8%. Meanwhile, the average hourly earnings are forecasted to have increased by 0.3% m/m and any positive surprise might reignite the recent USD bullish trend.
This will be followed by the release of US ISM non-manufacturing PMI and scheduled speeches by a slew of influential FOMC members, which might further collaborate towards producing some meaningful trading opportunities on the last trading day of the week.
Technical levels to watch
Yohay Elam, FXStreet’s own Analyst offers some important technical levels to watch for: “The Technical Confluences Indicator shows that the currency pair faces an immediate cap at 111.54. The next minefield is quite close. USD/JPY faces another substantial hurdle at 111.84 where we see the convergence of the Fibonacci 38.2% one-month, the Fibonacci 38.2% one-month, the Pivot Point one-day R1, the SMA 10-1d, and more.”
“Looking down, dollar/yen has quite a few support lines ready to absorb it but these are all spread out until we note a cluster of levels that stands on its own at 111.12 where we see the Bollinger Band one-day Lower, the Fibonacci 161.8% one-day, the PP 1w-S1, and the PP 1d-S2 meet,” he added further.
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