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USD/JPY off 6-year highs, NFP eyed

FXStreet (Córdoba) - USD/JPY has entered a consolidation phase over the last hours after pulling back from a 6-year high with investors awaiting the US nonfarm payrolls report later on the day.

USD/JPY rose nearly 100 pips over the last two sessions, helped by higher US yields, and reached its highest level since September 2008 at 105.70 before correcting lower. The retracement low was 105.23, around its Thursday’s closing price. At time of writing, the pair is trading at 105.30, virtually unchanged on the day but up 1.08% this week.

The dollar strengthened broadly after the European Central Bank unexpectedly cut rates and took a series of expansionary measures aimed to underpin growth and fight deflation. USD/JPY was also propelled by diverging monetary policy stances in US and Japan after Bank of Japan Thursday kept its policy on hold.

USD/JPY levels to watch

Having reached levels not seen since the financial crisis of 2008, immediate target on the upside is at 106.00. Further resistance could be found at 106.15 (Oct 3 2008 high). On the flip side, supports are seen at 104.75 (Sept 4 low) and 104.45 (10-day SMA).

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