The Dollar/Yen is trading just below a multi-year previous support, 108.50, which for now it’s acting as resistance, as trade tensions linger. Traders are likely awaiting the result of today’s U.S.-Mexico talks on migration and tariffs and the US employment report. Trump has threatened 5% tariffs unless Mexico acts on migrants. The negotiations wrapped up on Thursday evening without an agreement, possibly capping any potential upside on this pair. In terms of macroeconomics, an above-forecast wage growth number will likely put a strong bid under the greenback, pushing the USD/JPY above 108.50 towards 109. However, if the data misses expectations, then a retest of 107.77 will be a high probability scenario.
The Dollar bulls are facing some strong resistance around 108.50-60, which is also the 50-day moving average. A break above it will be considered a huge step forward for the bulls, which will open doors for a 109 retest. However, if the sellers gain momentum and reject price at these levels, then a retest of the recent low, 107.77, will be very likely.
Support: 107.77 / 107.50
Resistance: 108.50 / 109