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USD/JPY rises toward 120.00 as stocks recover

FXStreet (Córdoba) - USD/JPY found support again around 119.50 and bounced to the upside, back toward 120.00 as stocks in Wall Street trimmed losses. The pair now stands around 119.90, near the end of trading in the US, around the same level it closed yesterday.

The pair continues to move sideways within a small trading range that is likely to keep price action limited ahead of the release of the Non-farm-payroll report on Friday.

In Wall Street, the Dow Jones is falling 50 points as it stands at 16,240 after bottoming at 16,075. The recovery in equities weakened the yen in the market. US government bond yields also moved off session lows. The 10-year yield dropped to 2.011 and then rebounded to 2.045.

USD/JPY ahead of a quiet session

The pair has been trading sideways around 120.00 since early September and is likely to continue that way for the next hours, at least until minutes before the US employment report. Labor market numbers could trigger volatility and pushed USD/JPY to break the range.

“The technical picture remains neutral, with the price contained between Fibonacci levels and below its 100 and 200 SMAs and the Momentum indicator stuck around its 100 level. The pair may finally break its range with the US Nonfarm Payroll release, but the reading has to be a huge surprise, either positive or negative, to be able to take the pair out it”, say Valeria Bednarik, Chief Analyst at FXStreet.

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