USD/JPY eases from 3-week tops, US jobs report remains in focus

   •  US-China trade optimism continues to dent JPY’s safe-haven status.
   •  Subdued USD price action does little to provide any additional boost.
   •  The upside remains capped ahead of the closely watched US jobs report.

The USD/JPY pair struggled to capitalize on its early uptick to three-week tops and has now drifted back to the lower end of its daily trading range, just above mid-111.00s.

The pair built on the recent positive momentum and remained supported by growing optimism over a possible resolution to the long-standing US-China trade disputes, especially after the US President Donald Trump said on Thursday that both countries were getting very close to a trade deal that could be announced within four weeks.

The latest positive trade-related developments between the world's two biggest economies boosted investors' appetite for perceived riskier assets, evident from a positive mood across equity markets, which weighed on the Japanese Yen's safe-haven status and lifted to pair to an intraday high level of 111.80.

The uptick, however, lacked any strong follow-through amid a subdued US Dollar price action. Moreover, investors also seemed reluctant to place any aggressive bets ahead of today's key release of the latest US monthly jobs report (NFP), which further collaborated towards capping gains, at least for the time being.

The US economy is expected to have added 180K new jobs in March and the unemployment rate is seen holding steady at 3.8%. The key focus will be on average hourly earnings, which will play an important role in influencing the USD price dynamics and produce some meaningful trading opportunities on the last trading day of the week.

Technical levels to watch

Any subsequent pull-back now seems to find immediate support near the 111.50-45 region, below which the pair is likely to accelerate the corrective slide further towards retesting the 111.00 round figure mark. On the flip side, momentum beyond the 111.80 region (session tops) now seems to lift the pair beyond the 112.00 handle towards testing YTD tops, around the 112.15 area.