USD/JPY: trapped between familiar barriers, waits nonfarm payrolls

• USD/JPY: bears taking control below the 110 handle, looking for a break to 109.00.
• USD/JPY: on the flip side, 110.20 territories could be a tough line to break.

USD/JPY has been offered in Tokyo hours while Japanese traders are on holiday and following a mixed day on Wall Street after the Fed held rates and made minor tweaks to the statement leading participants in the markets to believe that there will be at least two more rate hikes in 2018, reinforcing the divergence between the Fed and BoJ. Currently, USD/JPY is trading at 109.76, down -0.07% on the day, having posted a daily high at 109.95 and low at 109.72.

USD/JPY was dropping to 109.60 on the kneejerk post-Fed decision and statement but was quickly scooped up by the bargain hunters and bulls intent on taking down the 110 barriers with eyes on the key 200-DMA/61.8% hurdles at 110.23-34. However, it will likely have to be a wait and see what the nonfarm payrolls comes out with on Friday before longs load up for an assault. 

US data nd the Fed

As far as the data and Fed went, the US Apr ADP National Employment arrived as 204k vs a consensus of 200k and 241k prior. As for the Fed, rates were left on hold. There were no clear signs of a June hike and that upset the dollar initially. However sentiment turned over as did the dollar. The 10's peaked at 2.99% in London trade before drifting lower in the US, 2.96%-2.99 %. DXY traded between 92.2230-92.8340. 

USD/JPY levels

USDJPY: Seems likely to trade a narrow range

Valeria Bednarik, chief analyst at FXStreet explained that the fact that the pair remains near the 110.00 threshold offsets chances of a steeper decline, although a downward correction is not out of the table according to technical readings in the 4 hours chart:

"Indicators have retreated within positive territory to fresh weekly lows. The price, however, remains well above bullish 100 and 200 SMA, and the 109.00 level, now a short-term line in the sand. As long as it holds above it, the risk will remain toward the upside, with a break above the 110.00 level favoring an advance up to 110.45, February monthly high."