USD/JPY: awaiting key event below 110 psychological handle

Currently, USD/JPY is trading at 109.90, down -0.12% on the day, having posted a daily high at 110.07 and low at 109.85.

USD/JPY remains below the psychological 1.10 handle having outperformed its G10 peers overnight, dropping from 110.80. The DXY also fell again hurt by the large 3.5pt decline in the service sector ISM report. However, the impending release of non-farm payrolls tomorrow is keeping activity light and flows to the sidelines in Tokyo. Wall Street was also mixed, despite another record high in the Dow, it was the other benchmarks that failed to impress and the yen benefitted there as well.

Nonfarm Payrolls Preview: NFP can't save the not-so-mighty dollar

For the day ahead, eyes remain with Australia again in the RBA's statement along with retails sales. Then, it's all attention back to the US session with the nonfarm payrolls. However, as Valeria Bednarik, chief analyst at FXStreet pointed out, it has been a long time since the US Nonfarm." The NFP report will only be relevant if it's a big miss," argued Bednarik.

USD/JPY levels

Valeria Bednarik explained that in the 4 hours chart, the price remains well below its 100 and 200 SMAs, with the shortest having accelerated below the largest, and with technical indicators holding within bearish territory. "There's a long way to the upside before calling a trend change, and seems unlikely that this would happen, even if US data surprise to the upside,  as the pair would need to close the week at least above 112.40 to have an opportunity the next one," noted Bednarik.