The US Dollar (USD) extended upside movement against the Japanese Yen (JPY) on Friday, increasing the price of USDJPY to more than 124.75 ahead of the US Nonfarm Payrolls release. The technical bias already remains bullish because of a Higher Low in the recent wave on daily chart.
As of this writing, the pair is being traded around 124.80. A hurdle may be noted near 125.00, the psychological number ahead of 125.89, the swing high of the last major upside rally as demonstrated in the following daily chart.
On the downside, the pair is likely to find a support around 124.59, the 76.4% fib level ahead of 123.79, the 61.8% fib level and then 120.40, the swing low of the last major dip on daily chart. The technical bias is bullish and will remain bullish as long as the 120.40 support area is intact.
The US Bureau of Economic Analysis is due to release the Nonfarm Payrolls report today during the early New York session. The U.S economy is expected to have added 223,000 nonfarm payrolls in July, enough to allow the Fed to pull the trigger on its first rate hike in nine years. The Fed will consider a possible first rate hike at its Sept. 16 and 17 meeting, but economists say that even with a strong report, it is far from clear cut when the Fed will move off of the zero fed funds target rate it has had in place since late 2008.
Considering the overall technical and fundamental outlook, selling the pair around the swing high of the last major rally appears to be a good strategy in short to medium term if we get a bearish pin bar, bearish engulfing candle or shooting star on the daily chart after the NFP report.