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USD/JPY remains capped by 113.60 on mixed US employment data

  • DXY fails to resist above 94 handle on mixed US jobs.
  • Underpinned by risk-on moods.
  • Focus shifts to prelim UoM consumer sentiment.

The bid tone around the US dollar weakened a bit, following the release of the final US labour market report for this year, knocking-off the USD/JPY pair towards 113.30 region.  However, the buyers lurked near the last, sending the rates back towards the midpoint of 113 handle.

USD/JPY trades way above all major DMAs

The spot quickly eroded almost 20-pips in a knee-jerk reaction to the below estimates average hourly earnings numbers before recovering ground to retest three and a half week tops at 113.59 levels. The bounce in the major can be attributed to the solid headline NFP numbers, which showed that the US economy added 228k jobs in Nov, higher than a 200k increase expected.

However, further upside appears limited, as Treasury yields remain little impressed by the mixed employment report. Also, with a Dec Fed rate hike already priced-in by the markets, the bulls are unable to find further impetus from the US jobs data. Meanwhile, the sentiment around the pair remains underpinned by persistent risk-om trades seen in the European equities.

With the US NFP report out of the way, attention now turns towards the US prelim consumer sentiment data, which could help extend the upside in the major.

USD/JPY Technical View

Valeria Bednarik, Chief Analyst at FXStreet, notes: “The technical picture is bullish according to the 4 hours chart, as the price surpassed its 100 and 200 SMAs, while technical indicators maintain their sharp bullish slopes, despite being in overbought territory. Early November daily highs around 113.65 come as the first resistance, ahead of the 114.00 figure and the 114.40 major long-term resistance. To revert the positive tone, the pair needs to fall below 113.10, en route then to 112.60. Support levels: 113.10 112.60 112.20. Resistance levels: 113.65 114.00 114.45.”

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