USD / JPY remains stable near 15-month highs above 111.50 before NFP

• USD / JPY is advancing for the third day in a row, although the continuation buy is missing.
• The optimistic expectations of the Fed continue to prop up the USD and offer some support to the pair.
• The pullback in US bond yields limits the pair’s rise ahead of the US NFP jobs report.

The pair USD/JPY now appears to have entered a bullish consolidation phase, holding near the 15-month high, just above the 111.50 region.

The pair has moved higher for the third day in a row on Friday and may now be looking to take advantage of this week’s strong positive move to the highest level since March 2020. The US dollar has held firm near three-month highs. amid speculation that the Fed will tighten its monetary policy sooner if price pressures continue to intensify. Apart from this, a generally positive tone around the stock markets has weighed on the safe-haven Japanese yen and offered some support to the USD / JPY pair.

However, a further decline in US Treasury yields it has prevented the bulls from opening aggressive positions and has limited any further gains for the USD / JPY pair. Investors also seem reluctant before monthly US employment data, which will be published later at the start of today’s American session. The NFP report could influence the Fed’s political outlook and boost the USD in the short term, which, in turn, will provide new directional momentum to the pair.

Even from a technical perspective, the strong upward movement of the past two days has stopped near a resistance marked by the upper bound of a rising channel more than two months old. Furthermore, the RSI (14) on the daily chart is about to enter the overbought zone, forcing the bulls to move on the sidelines ahead of Friday’s key event. This makes it prudent to wait for a sustained breakout above the channel barrier before positioning for any further bullish movement.

USD / JPY technical levels