USD/JPY stays patient as NFP data loom
USD/JPY remains directionless in a tight range, unable to attract sufficient buyers to close above the 157.00 level, which is normal behavior ahead of Friday’s nonfarm payrolls report.
From a technical perspective, the short-term bias is skewed to the upside, as the price is maintaining a strong foothold above its 20- and 50-day simple moving averages (SMAs) at 156.20 and 155.35, respectively, and continues to trade within a bullish channel. The RSI is holding above its neutral 50 mark, while the stochastic oscillator is poised for an upside reversal, both signaling persistent upside pressure too.
In a positive scenario where the pair rallies beyond the 157.70 resistance, all the attention could shift to the 2025 peak at 158.86. A decisive break above that level could extend gains towards the 160.00 psychological mark or even higher to 161.00. However, caution is warranted, as any aggressive moves beyond 2025 levels could trigger FX intervention from Japanese authorities, potentially curbing bullish momentum.
Alternatively, sellers could take full control if the price closes decisively below the key floor at 154.35. In that case, the short-term outlook would turn bearish, opening the door for further declines toward the 153.00 level, which coincides with the 38.2% Fibonacci retracement of the September–November rally.
Overall, USD/JPY appears to be struggling to resume its upward trajectory, despite technical indicators detecting persisting demand for the dollar. In the meantime, the pair could stay on the sidelines unless the bulls manage to break above 157.70 or the bears push prices below 154.35.
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