USD/JPY falls to test weekly lows around 113.50 despite upbeat US data

• October US employment report surpasses expectations.
• US dollar weakens as Treasury yields decline despite employment data.
• USD/JPY remains sideways, now testing the lower bottom.

The USD/JPY peaked at 114.02 following the US employment report and then turned to the downside. Recently it bottomed at 113.48, the lowest level in three days. It is hovering around 113.50, near the lowest bottom of the current range.

The US official employment report came in above expectations, with payroll rising by 531K above the 425K of markets consensus. The dollar initially rose but then weakened amid lower US yields. The economic numbers were not enough strong to change the perspectives of the November FOMC meeting. The views presented by Jerome Powell on Wednesday are still intact after today’s NFP.

The reversal in the bond market, with the US 10-year yield falling from 1.54% to 1.47%, the lowest in a month, pushed USD/JPY to the downside. The pair received support from market sentiment. The Dow Jones is up by .085% and the Nasdaq gains 0.60%.

Despite recent price action, USD/JPY continues to move sideways in a range between 113.40 and 114.20, now from more than two weeks. It is trading closer to the lower bottom. A break under 113.40 could trigger a bearish corecction. Still the dominant trends is bullish.

Technical levels