The relatively mixed market sentiment continued in early September trading, making investors wary of safe-haven currency movements.
The US dollar however is more influenced by fundamental factors that are the focus of investors after the annual event of the Jackson Hole rally last weekend received a dovish signal by Federal Reserve (Fed) Chairman Jerome Powell regarding central bank monetary policy.
Thus, the US dollar is expected to continue to depreciate ahead of this weekend’s NFP jobs report despite a slight strengthening by the US dollar at the August trading close.
After yesterday’s private sector employment report gave a negative indication to the NFP report, the re -depreciating US dollar has pushed prices from continuing to record higher gains.
Relatively gloomy market sentiment is seen as difficult to drive the Yen in a clearer direction. Moreover, passive views by Japanese central bank policymakers are seen to add pressure on the Yen.
On the chart of the safe-haven currency pair USD/JPY yesterday saw a rise to the latest 3-week high, but the strengthening of the US dollar that failed to be sustained made the price decline again.
The rally reached a level of around 110.400 before the price plunged 50 pips to a level of around 109.900 and flattened above that level until the end of the New York session.
Price movements seen further boosted by changes in the value of the US dollar will focus on the US NFP employment data report for August which expects a decline should the reading decline.
The lower decline is expected to test the support level around 109.700 before heading to the focus level of 109.300.
The continued decline could reach up to the support zone of 108,700 again which was an important zone supporting the price rise again during early August trading.
However, if the price manages to show a surge, the resistance level at 110.600 will be the focus for the price to continue to record the latest highs this week.
It is likely that price movements will be more gloomy as investors await the results of the NFP jobs report on Friday to determine further price direction.
