- Limited tours awaiting key US data, DXY pulls back.
- USD / JPY remains above 109.00, capped below 109.20.
El USD / JPY is trading in a range between 109.19 and 109.05 for hours. The market expectation is set on what will be the release of the US employment report for April, which is expected to show an increase in non-farm payrolls of 978,000.
In the Asian session the USD / JPY traded momentarily below 109.00 (low at 108.92), before bouncing higher and climbing towards 109.20. The cross remains with limited travels, moving between the optimism of the exchanges that weakens the yen and the retracement of the DXY. The dollar index is at a week-long lows near 90.80.
The Treasury yields tThey are also with range tours for several sessions. The 10-year rate is 1.57%. The employment data can have a wide impact here and therefore in the USD / JPY.
The labor market figures will be released against a backdrop of a very positive outlook for the US economy and with the major Wall Street indices in record levels. The data from China showed a higher than expected rise in imports and exports in April and a rise in the Caixin PMI for services. This contributed to the optimistic climate in equity markets.
On Japan there was a rise in the services PMI indicator, above expectations at 49.5. With regard to coronavirus, states of emergency were extended in the prefectures of Tokyo, Osaka, Kyoto and Hyogo; and those of Aichi and Fukuoka were added.
Current support at 109.00
From a technical point of view, the USD / JPY has been rejected below 109.00. A confirmation below would point to more weakness ahead in the pair. The next support can be seen at 108.70.
On the upside, the pair faces first resistance at 109.20, followed by 109.45 / 50 and current week highs at 109.70.
Additional levels
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