The dollar index pushed back above 80 resulting in a reversal in most of the major currency pairs. USD/JPY finally popped back above 102 but has done little in Asia today and continues to linger around 102.20. This pair had been languishing and testing key support levels for most of the week and finally got a catalyst from this data.
On the daily chart there is a downtrend that comes in around 102.10. While the pair has poked its head above this line, the key is to see if it can close above it as well. Should this downtrend be broken, then there is potential for the pair to extend its near term gains.
However, the USD’s run could lose steam if the market feels this solid round of jobs data won’t necessarily change the Fed’s view. In that case, this could see renewed weakness in the pair and result in renewed near-term weakness.