USD/JPY steadily climbs back to 109.00 neighbourhood, fresh session tops

USD/JPY regained positive traction on Monday and recovered a major part of the post-NFP losses.
The risk-on mood undermined the safe-haven JPY and remained supportive of the positive move.
A pickup in the US Treasury bond yields eased the USD bearish pressure and remained supportive.

Haresh Menghani FXStreet

The USD/JPY pair edged higher through the first half of the trading action and was last seen hovering near daily tops, just below the 109.00 round-figure mark.

A combination of factors assisted the pair to regain positive traction on the first day of a new trading week and recover a major part of Friday's post-NFP losses to over one-week lows. The underlying bullish sentiment in the financial markets was seen as a key factor that undermined demand for the safe-haven Japanese yen. Apart from this, worries that the recent surge in COVID-19 cases could hinder Japan's fragile economic recovery further acted as a headwind for the JPY.

On the other hand, a goodish pickup in the US Treasury bond yields assisted the US dollar to stage a modest rebound from the lowest level since February 25. This was seen as another factor that assisted the USD/JPY pair to snap three consecutive days of the losing streak. The pair, for now, seems to have stalled its recent pullback from the 109.70 region, though any meaningful upside seems elusive amid expectations that the Fed will keep interest rates low for a longer period.

Friday’s disappointing US monthly jobs report reaffirmed dovish Fed expectations, which might hold bulls from placing aggressive bets and cap gains for the USD/JPY pair. The headline NFP showed that the US economy added only 266K jobs in April, far lower than consensus estimates pointing to a reading of nearly one million. Adding to this, the previous month's reading was also revised down to 770K from 916K and the unemployment rate unexpectedly edged higher to 6.1% from 6.0% in March.

Hence, it will be prudent to wait for some strong follow-through buying before positioning for any further appreciating move. This, in turn, suggests that any subsequent positive move might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly amid absent relevant market moving economic releases.

Technical levels to watch

USD/JPY

Overview
Today last price	108.95
Today Daily Change	0.30
Today Daily Change %	0.28
Today daily open	108.65

Trends
Daily SMA20	108.71
Daily SMA50	108.9
Daily SMA100	106.62
Daily SMA200	105.88

Levels
Previous Daily High	109.29
Previous Daily Low	108.34
Previous Weekly High	109.7
Previous Weekly Low	108.34
Previous Monthly High	110.85
Previous Monthly Low	107.48
Daily Fibonacci 38.2%	108.7
Daily Fibonacci 61.8%	108.93
Daily Pivot Point S1	108.23
Daily Pivot Point S2	107.81
Daily Pivot Point S3	107.27
Daily Pivot Point R1	109.18
Daily Pivot Point R2	109.71
Daily Pivot Point R3	110.13

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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