USD/JPY continues to erase daily losses, steadies below 109

Wall Street looks to finish the month on a strong note.
US Dollar Index climbs above 95.50 in the NA session.
Unemployment in Japan is expected to edge down to 2.4% in December.

Eren Sengezer FXStreet

After finding daily support at 108.50, the USD/JPY extended its rebound in the NA session and rose to 108.90 before going into a consolidation phase. As of writing, the pair was trading at 108.82, losing 0.12% on a daily basis.

The greenback continued to retrace yesterday sharp fall that was caused by the dovish message delivered in the FOMC statement with the US Dollar Index turning positive on the day above 95.50. However, the fact that the 10-year T-bond yield is losing more than 2% on the day suggests that the US Dollar Index's recent recovery is mostly technical and supported by month-end flows rather than fundamental developments. At the moment, the DXY is up 0.15% at 95.55.

Meanwhile, improved market sentiment on Thursday provided an additional boost to the pair in the second half of the day. Although the Dow Jones Industrial Average stays in the negative territory amid the selling pressure surrounding the financials, both the S&P 500 and the Nasdaq Composite post strong gains and remain on track to record their largest monthly percentage gains in nearly three years.

Japan's Institue of Labour will publish its jobs/applications and the unemployment rate for December in the early Asian session. However, ahead of the NFP report from the U.S., the market action is expected to remain subdued.

Key technical levels

USD/JPY

Overview:
    Today Last Price: 108.82
    Today Daily change %: -0.12%
    Today Daily Open: 108.95
Trends:
    Daily SMA20: 108.94
    Daily SMA50: 110.93
    Daily SMA100: 111.92
    Daily SMA200: 111.26
Levels:
    Previous Daily High: 109.74
    Previous Daily Low: 108.81
    Previous Weekly High: 110
    Previous Weekly Low: 109.14
    Previous Monthly High: 113.83
    Previous Monthly Low: 109.55
    Daily Fibonacci 38.2%: 109.17
    Daily Fibonacci 61.8%: 109.39
    Daily Pivot Point S1: 108.59
    Daily Pivot Point S2: 108.23
    Daily Pivot Point S3: 107.65
    Daily Pivot Point R1: 109.53
    Daily Pivot Point R2: 110.11
    Daily Pivot Point R3: 110.47

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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