USD/JPY stays near the highs in narrow trading today
Buyers are still in control of the pair as price keeps around 109.55-60 during European morning trade so far. All the anticipation is on the US non-farm payrolls data later at 1330 GMT.
Once again, the data will offer rather asymmetric risks to the dollar in general. The thinking here is that any major hiccups may present a case for a weaker US economic outlook and possibly room for the Fed to act i.e. more rate cuts perhaps.
Meanwhile, on the flip side, it’s all about wages data in gauging whether or not that can translate into any meaningful inflation pressures to change the current line of thinking at the Fed. But the threshold for any significant pricing for that is really, really high.
As such, a more positive jobs report may keep the dollar more steady with upside gains likely to be more measured. However, a really poor report could spur risk aversion and threaten a more pronounced drop in the greenback.
With the scenarios above laid out, let’s take a look at how that factors into USD/JPY.
For the pair, the upside momentum over the last few months has been capped by resistance around 109.70 and that will remain a key spot to watch out for later.
Exporter offers are also seen around 110.00 so the figure level will be another key spot to watch in capping upside momentum later – if it does come – later in the day.
As for any downside momentum, look towards the 109.00 level as the first area where buyers may lean on before the 100-hour moving average @ 108.80 comes into play.
Beyond that, the 200-hour moving average sits @ 108.64 and that rests closer to the 200-day MA (blue line) above @ 108.60 so that will be a key region for buyers to keep any upside momentum over the past few days.