Considering the usual pre-NFP lull, that is certainly likely
The firm says that USD/JPY is to find support at 106.00 ahead of the non-farm payrolls data, with market participants wanting to see whether the stock adjustment yesterday is a temporary correction or if it will lead to a more significant drop.
Adding that the pair remains firm at 106.00 amid the possibility of a stronger report later, though they argue that it is hard to see it testing the upper 106.00 levels.
In the aftermath of the report, they say that the dollar may still be supported as the euro has hit 'key trigger levels' which sparked ECB intervention, leading to unwinding in euro long positions this week.
Let's take a look at the chart:
The pullback in the pair in US trading yesterday saw price action fall back towards 106.00 but buyers are keeping a defense of the key hourly moving averages.
The confluence of the key near-term levels are now seen @ 106.04-07, so that will provide a key support region (alongside the 106.00 handle) for buyers to lean on as we look towards the next few sessions before the weekend.
Keep above that and buyers are still in near-term control but break below and that could open further downside as sellers establish a more bearish near-term bias.
As for topside momentum, the high yesterday around the 106.50-55 region will be the first near-term resistance point but the bigger picture level @ 106.90-00 will offer for buyers if they gather enough momentum for a push higher later today.
The 100-day moving average @ 106.91 will also come into play in such a scenario.
