USD/JPY Price Analysis: Makes another attempt to recapture 50-DMA ahead of NFP

• USD/JPY regains 113.00 and beyond amid a recovery in Treasury yields.
• US dollar remains lacklustre in pre-NFP trading amid looming Omicron risks.
• 50-DMA is the level to beat for the bulls to initiate a sustained recovery.

USD/JPY is trading better bid above 113.00, having caught a fresh bid below the latter over the last hours.

The recovery in the risk sentiment has weighed on the demand for the safe-havens such as the yen, Treasury bonds etc, triggering a fresh rebound in the yields across the curve. The renewed uptick in the US rates has underpinned the pair’s bounce.

The spot looks to build on Thursday’s upswing from near monthly lows of 112.53, as the Fed’s hawkish tilt and upbeat NFP expectations keep the downside cushioned in the Treasury yields, as well as, the US dollar.

Meanwhile, investors ignore Japan’s pledge to deploy necessary fiscal spending next year, as all eyes remain on the US payrolls and ISM Services PMI due later this Friday.

USD/JPY’s daily chart shows that the price continues to face stiff resistance at the upward-sloping 50-Daily Moving Average (DMA), currently at 113.41.

With the renewed upside, the spot looks to recapture the latter. Although a daily closing above the 50-DMA is needed to initiate a meaningful recovery towards the mildly bearish 100-DMA at 113.92.

USD/JPY: Daily chart

The 14-day Relative Strength Index (RSI), however, remains below the midline, threatening the bullish attempts.

The rejection once again at the 50-DMA hurdle could expose the monthly lows once again, below which a sell-off towards the ascending 100-DMA at 111.64 cannot be ruled out.

USD/JPY: Additional levels to consider