USD/JPY holds steady near 15-month tops, above mid-111.00s ahead of NFP
- USD/JPY edged higher for the third straight session, though lacked follow-through buying.
- Hawkish Fed expectations continued underpinning the USD and extended some support.
- Sliding US bond yields held bulls from placing fresh bets ahead of the US jobs report (NFP).
The USD/JPY pair now seems to have entered a bullish consolidation phase and was seen oscillating in a range near 15-month tops, just above mid-111.00s.
The pair edged higher for the third consecutive session on Friday and might now be looking to build on this week's strong positive move to the highest level since March 2020. The US dollar stood tall near three-month tops amid speculations that the Fed will tighten its monetary policy earlier if price pressures continue to intensify. Apart from this, a generally positive tone around the equity markets undermined the safe-haven Japanese yen and extended some support to the USD/JPY pair.
However, a fresh leg down in the US Treasury bond yields held bullish traders from placing any aggressive bets and kept a lid on any further gains for the USD/JPY pair. Investors also seemed reluctant ahead of the US monthly jobs data, due for release later during the early North American session. The closely watched NFP report could influence the Fed's policy outlook and drive the greenback in the near term, which, in turn, will provide a fresh directional impetus to the major.
Even from a technical perspective, the strong move up witnessed over the past two trading sessions paused near a resistance marked by the top boundary of an over two-month-old ascending channel. Moreover, RSI (14) on the daily chart is on the verge of breaking into the overbought zone and forced bulls to move on the sidelines ahead of Friday’s key event risk. This makes it prudent to wait for a sustained break through the channel barrier before positioning for any further appreciating move.
Technical levels to watch