The USDJPY pair finished the week with only marginal losses as the greenback has trimmed the previous decline on Friday, due to a spectacular US jobs report. The price has refreshed one-week highs in Asia today, but the bullish impetus fails to gain momentum ahead of the 14- and 20-DMAs in the 109.70-109.80 area.
Despite the short-term technicals have improved recently, the pair’s upside bias is in question. On the other hand, the US economic figures signal a healthy GDP growth and therefore suggest that the Fed may pick a more aggressive tightening path down the road, which is a bullish factor for the buck.
On the other hand, the threat of a trade war between the US and other countries, that has increased over the last few days, point to the prospect of yen buying amid the potential risk aversion in the global markets. Moreover, the BoJ has cut the size of JGBs buying and the market started to price in the upcoming tapering in Japan.
As such, the pair may soon switch back into a bearish mode, especially considering the dollar’s inability to make a clear break above the mentioned local resistance that is standing on the way to 110.00.