USD/JPY analysis: yen strong of soft yields
|USD/JPY Current price: 110.98
The USD/JPY pair recovered the ground lost post-Fed, rallying up to a daily high of 111.13, to settle around the 111.00. Nevertheless, the yen remains strong heading into the US Nonfarm Payroll report, amid softer US Treasury yields and the poor performance of equities during the Asian and European sessions. Japanese consumer confidence released during the past Asian session surged to its highest since September 2013, printing 43.9 from previous 43.1, also beating expectations of 43.5, although the news failed to affect the yen. Much of the upcoming direction of the pair depends on the outcome of the US employment report, as the safe-haven currency tends to be the most sensitive to US data. From a technical perspective, the upward potential remains limited according to the 4 hours chart, as the price remains below a bearish 100 SMA, currently around 111.50, whilst indicators in the mentioned time frame barely stand in positive territory with limited upward strength. The pair has a major Fibonacci resistance at 112.00, the 38.2% retracement of the late 2016 monthly rally, with an extension above it favoring additional gains for the following sessions.
Support levels: 110.95 110.50 110.10
Resistance levels: 111.60 112.00 112.50
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