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With the U.S. NFP report just around the corner, I thought we should check out USD/JPY for opportunities. What do you think?

Currency Snapshot:

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Economic Calendar:

  • France’s government balance a 6:45 am GMT
  • Spain’s services PMI at 7:15 am GMT
  • Italy’s services PMI at 7;45 am GMT
  • France’s final services PMI at 7:50 am GMT
  • Germany’s final services PMI at 7:55 am GMT
  • Euro Zone’s final services PMI at 8:00 am GMT
  • U.K.’s final services PMI at 8:30 am GMT
  • Euro Zone’s retail sales at 9:00 am GMT
  • U.S. NFP report at 12:30 pm GMT. Read our preview if you’re trading the event!

What to Watch: USD/JPY

USD/JPY 1-hour Forex Chart
USD/JPY 1-hour Forex Chart

The euro zone has a couple of PMI reports on tap today, but focus will likely be on USD/JPY as traders prepare for the U.S. NFP report.

Word around is that markets are expecting a 100,000 net jobs increase, which is only a part of the damage recorded up until the BLS’ survey that ended in March 12.

After bouncing TWICE from 107.00 this week, USD/JPY is now trading just above the 108.00 handle. This puts the pair at the top of a channel resistance and above the 100 SMA on the 1-hour time frame.

A worse-than-expected NFP report could drag USD against its fellow low-yielding JPY. USD/JPY could drop back to 107.00 or make new intraweek lows closer to the 106.50 or 105.75 previous areas of interest.

Strong NFP figures, on the other hand, could encourage risk-taking in the markets and boost major yen pairs including USD/JPY. The pair could break above the channel potential resistance levels near 108.50, 109.50, and 110.00

Take note that USD/JPY has moved by about 200 pips on Fridays in the last 30 days and is generally on a “bearish” trend on the daily time frame.