USDJPY trades at sensitive levels before NFP
Mainly, the USDJPY pair shows a significant response to the NFP report, whether to the upside or the downside depending on the data.
Analysts predict to see a job addition of 225,000 in May, after the creation of 223,000 jobs in April.
A better than predicted reading is estimated to push the dollar higher on mounting expectations the Fed would raise its borrowing cost with at the beginning of the third quarter.
Recently, the U.S. labor market has showed a remarkable progress as it continued the robust record of creating more than 200,000 jobs since March 2014.
It is worthwhile to mention, the U.S. economy has added monthly average jobs of 252,000 since March last year.
Before the release of the data, the pair is showing a rise where it trades around 124.70, but it faced resistance near 124.75.
In case the nonfarm figures came better than forecast, the pair may resume its rally, especially as last week it breached the support line depicted on the daily chart.
By looking at the chart, it is clear that the price retreated this week as it approached resistance near 125 levels.
The upper band of the Bollinger Bands acted as resistance, noting a rise above indicates the pair is overbought and may provoke a downside correction.
The RSI 14 momentum indicator, meanwhile, moves in overbought areas above the 70 line, but still did not give a bearish sign.
The USDJPY is currently trading above today’s Pivot Point located at 124.26, where the pair will face coming resistance at 125.15 then 126.07.
On the other hand, the nearest support is found at 123.85, which if breached, could send the pair to the next support at 123.35.