- USD/JPY gains traction for the fourth straight session and shot to three-month tops.
- The upbeat market mood undermined the safe-haven JPY and remained supportive.
- Bulls shrugged off the prevalent USD selling bias as the focus now shifts to NFP report.
The USD/JPY pair broke out of its Asian session consolidation phase and jumped to fresh two-month tops, around the 109.35-40 region in the last hour.
The pair added to this week’s break out momentum beyond the very important 200-day SMA and continued gaining traction for the fourth consecutive session on Friday. The upbeat market mood continued underpinning the safe-haven Japanese yen and was seen as one of the key factors driving the USD/JPY pair.
Despite the ever-increasing number of COVID-19 cases, the risk sentiment remained well supported by growing optimism about a sharp V-shaped recovery for the global economy. The USD/JPY bulls seemed rather unaffected, rather shrugged off concerns about a further escalation in tensions between the US and China.
It is worth recalling that relations between the world’s two largest economies soured further after the US suspended passenger flights of four Chinese airlines to and from the country with effect from June 16. The move came after the dragon nation earlier barred American carriers from re-entering China.
Meanwhile, the prevalent US dollar selling bias did little to provide any meaningful impetus, with the offered tone surrounding the safe-haven Japanese yen turning out to be an exclusive driver of the USD/JPY pair’s momentum to the highest level since late March.
It, however, remains to be seen if the pair is able to capitalize on the momentum or witnessed some profit-taking at higher levels. Traders now start repositioning for Friday’s release of the closely watched US monthly jobs report – popularly known as NFP.
The headline NFP print is expected to show that the US economy lost 8 million jobs in May and the unemployment rate is anticipated to have jumped to 19.8% on the back of coronavirus-induced lockdowns. The data will influence the near-term USD price dynamics and help determine the next leg of a directional move for the USD/JPY pair.
Technical levels to watch
Share
