USD/JPY prints day low at 128.50 USD Index loses momentum, US NFP buzz

USD/JPY has dropped to near 128.50 as the USD Index is struggling to extend gains above 101.55.
Subdued US corporate earnings have strengthened the risk-off market mood.
US Secretary of State Antony Blinken to meet with Chinese President Xi Jinping for a "new phase of stepped-up engagement".

Sagar Dua FXStreet

The USD/JPY pair has refreshed its day’s low at 128.50 as the US Dollar Index (DXY) has sensed barricades after testing Thursday’s high around 101.55 in the Asian session. The asset is expected to display volatile moves ahead as investors are getting anxious ahead of the release of the United States Nonfarm Payrolls (NFP) data.

S&P500 futures have extended their losses amid unimpressive earnings by US corporate, portraying a risk-off market mood. The three-day winning spell by the 500-US stock basket futures has terminated for now. Bullish action shown by the USD Index is facing exhaustion after reaching near 101.55, however, the upside bias is intact.

Contrary to the risk-aversion theme, the demand for US government bonds is accelerating vigorously amid deepening signs of inflation softening. The 10-year US Treasury yields have dropped further below 3.37%.

Investors are keenly awaiting the release of the US NFP data for further guidance. According to the estimates, the US economy has added fresh 185K jobs vs. the former release of 223K. The United States labor market is resilient as the demand for labor force is exceeding expectations. Therefore, the employment cost index data could deliver a surprise release ahead. The Unemployment Rate is expected to display an escalation to 3.6% from the prior release of 3.5%.

The headlines conveying US Secretary of State Antony Blinken's meeting with Chinese President Xi Jinping in Beijing could provide strength to the risk-on mood. This could be a "new phase of stepped-up engagement" between the two countries, after further complications to diplomatic relations arising from the Covid-19 pandemic, as reported by Financial Times.

On the Japanese Yen front, Jibun Bank Services PMI (Jan) dropped marginally to 52.3 from the former release of 52.4.

Meanwhile, former Bank of Japan (BOJ) Deputy Governor Hiroshi Nakaso has taken up a post heading a financial conference under the Asia-Pacific Economic Cooperation (APEC) advisory council as reported by Reuters. Former BoJ Deputy Governor is seen as a leading contender to take over incumbent Haruhiko Kuroda, whose term ends on April 8.

USD/JPY

Overview
Today last price	128.54
Today Daily Change	-0.21
Today Daily Change %	-0.16
Today daily open	128.75

Trends
Daily SMA20	129.91
Daily SMA50	132.97
Daily SMA100	138.9
Daily SMA200	136.78

Levels
Previous Daily High	129.13
Previous Daily Low	128.08
Previous Weekly High	131.12
Previous Weekly Low	129.02
Previous Monthly High	134.78
Previous Monthly Low	127.22
Daily Fibonacci 38.2%	128.49
Daily Fibonacci 61.8%	128.73
Daily Pivot Point S1	128.18
Daily Pivot Point S2	127.61
Daily Pivot Point S3	127.13
Daily Pivot Point R1	129.23
Daily Pivot Point R2	129.71
Daily Pivot Point R3	130.28

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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