Daily London Session Watchlist: USD/JPY

Ready to trade the NFP release?

If you’re still looking for setups, then you’ll love to learn that USD/JPY is flirting with a key inflection point right now.

But before we talk setups, check out the top headlines that moved the major currencies in the last few hours:

• Fed’s Evans: not unreasonable to wait until 2024 to raise short-term rates
• Fed’s Bullard: resources available to fund consumption suggest continued recovery through H1 2021
• Fed’s Mester: Fed will be “patiently accommodative”
• Error puts millions of U.S. stimulus payments in wrong accounts -TurboTax
• Japan’s household spending unexpectedly rose in November
• Trump concedes Biden will take office, vows smooth transition
• Sinovac’s Covid-19 vaccine is 78% effective in Brazil late-stage trials
• Brisbane to enter three-day lockdown over single infection
• Asian stocks hit fresh records on hopes for global recovery

Upcoming Potential Catalysts on the Economic Calendar:

• 6:45 am GMT Switzerland’s unemployment rate
• 7:00 am GMT Germany’s industrial production
• 7:00 am GMT Germany’s trade balance
• 7:45 am GMT France’s consumer spending
• 7:45 am GMT France’s industrial production
• 7:45 am GMT France’s trade balance
• 8:30 am GMT U.K.’s Halifax house price index
• 10:00 am GMT Eurozone unemployment rate
• 1:30 pm GMT U.S. NFP report
• 1:30 pm GMT Canada’s labor market numbers

What to Watch: USD/JPY

The last few trading sessions has been good to USD/JPY, which has broken above a short-term downtrend to trade just under the 104.00 psychological handle.

A better-than-expected release would encourage risk-takers to extend the dollar’s upswing. A break above 104.00 could push USD/JPY to its 104.25 and 104.50 previous areas of interest.

But what if we do see terrible numbers and traders start worrying about…fundamentals?

A burst of bearish pressure, however, could drag the Greenback down to the 103.50 levels or even 103.25 inflection point.