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The non-farm payrolls (NFP) report is up in a few hours, yo!

Will the release push USD/JPY past the big 112.00 resistance?

Before we talk NFP and setups, let’s review headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

U.S. jobless claims post sharp decline to 326,000, better than expectations

Senate passes short-term increase to the debt limit, House to vote on it next

Canada’s Ivey PMI shows activity expanding at a faster pace in September

Japan’s August real wages rise for second straight month

Australia’s central bank sees risks in housing market ‘exuberance’

China’s Sept services activity returns to growth – Caixin PMI

Japan household spending falls as COVID-19 curbs sap economic recovery

Asian shares rise as Chinese markets return from break

Dollar creeps higher ahead of U.S. jobs report

German exports slip for first time in 15 months – stats office

Upcoming Potential Catalysts on the Economic Calendar:

ECB’s Lagarde to give a speech at 12:05 pm GMT
U.S. Treasury Secretary Yellen to give a speech at 12:05 pm GMT
U.S. NFP reports at 12:30 pm GMT
Canada’s labor market numbers at 12:30 pm GMT

If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.

What to Watch: USD/JPY

USD/JPY Daily Forex Chart
USD/JPY Daily Forex Chart

I know we usually look at shorter time frames but you gotta see how USD/JPY knocking on the 112.00 psychological handle is a big deal for the pair.

Later today we’ll see Uncle Sam’s labor market numbers for September. Word around is that jobs could see a net gain of just under 500K while the unemployment rate could dip to 5.1%.

If the numbers print as well as this week’s ADP and average initial jobless claims suggest, then the Fed will have fewer reasons not to start tapering their asset purchases in November.

If more low-key hawkish dollar bulls pile in, then USD/JPY could finally break above 112.00.

The 114.00 zone is a good target but it depends on whatever momentum we see a few trading sessions after the release.

If the NFP report disappoints, however, or if we see a buy-the-rumor, sell-the-news situation, then at least a few dollar buyers could take profits from USD/JPY’s current levels ahead of the weekend.

USD/JPY’s average volatility suggests that the pair could move by about 56 pips but the NFP catalyst as well as the rejection at 112.00 could send it lower today.

How about you? Any plans on trading major dollar pairs during the NFP release?