USD/JPY consolidated near 7-week lows, awaits NFP for fresh impetus

The USD/JPY pair has managed to bounce off lower levels and is currently holding in neutral territory around the 110.00-110.10 region. 

Earlier during Asian session on Friday, the pair weakened to retest 7-week lows despite weaker average cash earnings figures from Japan, slumping 0.4% for June as compared to a 0.6% gain seen in the previous month. Persistent US Dollar weakness, on growing worries over the US President Donald Trump's alleged links with Russia, was seen weighing on the major.

Meanwhile, dip buying interest seems to have emerged at lower levels as investors seemed reluctant to initiate aggressive bets ahead of the closely watched NFP report, which might influence the Fed's near-term monetary policy outlook and provide some immediate respite for the greenback.

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The up-move, however, lacked conviction amid prevalent cautious sentiment around Asian equity markets, which benefitted the Japanese Yen's safe-haven appeal and kept a lid on the pair's recovery from the lowest level since mid-June. 

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes: "The pair has formed higher lows - 108.13, 108.80 - on the monthly 50-MA, which has bottomed out and is sloping upwards. As of now, the spot is trading below its weekly 50-MA of 110.45. The pair could leave another higher low around the weekly 50-MA if wage growth figures print higher than expected. Such a move would open up upside towards 112.30. On the other hand, a weaker-than-expected wage growth data would add credence to the bearish breakdown on the yield curve chart and open doors for a sell-off to 108.80-108.13 levels."