The USD/JPY pair erased most of its Wednesday’s gains, closing the day just below the 120.00 figure. The Japanese yen advanced, despite the strong upward momentum in European and American stocks, as the EUR/JPY sold-off with the ECB, spurring yen´s intraday demand.
The USD/JPY bounced back up to the 120.35 region following positive US data, finding short term selling interest around the 50% retracement of the last two weeks decline.
The technical picture still favors the downside, as the 1 hour chart shows that the price is well below its moving averages, whilst the technical indicators have lost their downward strength, but remain below their mid-lines.
In the 4 hours chart, the Momentum indicator holds around the 100 level while the RSI aims slightly higher around 41 and the moving averages maintain their bearish slopes well above the current price.
The pair may reverse course with a strong US employment reading, and advance up to 121.00 the 200 DMA.