FxWirePro: USD/JPY remains subdued below 20-DMA ahead of U.S. NFP report, bias bearish

USD/JPY chart on Trading View used for analysis

• USD/JPY erased some of Fed-led losses on Thursday to close at 108.84 after hitting session lows at 108.49.
   
• However, recovery attempts in the pair lack traction and upside remains capped below 20-DMA resistance.
   
• Data released earlier today showed Japan Nikkei Manufacturing PMI beat expectations (50) to print at 50.3 in Jan.
   
• Technical studies are biased lower and we do not see any major signs of reversal in the pair.
   
• Markets are likely to remain sidelined ahead of the crucial U.S. NFP data due later in the NY session.
   
• Analysts at Barclays say "“Nonfarm payrolls to have increased 160k in January … following some payback from December strength." 
   
• They expect hourly earnings to rise 0.3% m/m (3.2% y/y) and average weekly hours to remain unchanged at 34.5.
   
• Market expectation is for payrolls to have increased 165k, expect hourly earnings to rise 3.2% y/y and average weekly hours to remain unchanged at 34.5.
   
• A big beat on expectations could put a bid under the USD. Readings inline with expectations may fail to move markets.
   
• With major bias for the pair remaining bearish, we would recommend using minor rallies to go short.
   
• Decisive break above 21-EMA could see further upside. Bearish invalidation only above 200-DMA.

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