USD/JPY Price Analysis: Faces stiff resistance just above 110.00, NFP eyed

• USD/JPY is back to square one after brief moves seen in Asia.  
• Acceptance above 21-SMA on the 4h chart is critical for further gains.
• Range trade likely to continue amid healthy support levels, ahead of NFP.

USD/JPY is struggling to extend gains above 110.00, as investors digest the news of the Japanese PM Yoshihide Suga stepping down ahead of the all-important US NFP report.

In a knee-jerk reaction to the Japanese political updates, USD/JPY fell as low as 109.79 before rebounding to 110.07.

However, the further upside remains capped in the major amid a broadly subdued US dollar and the Treasury yields, as markets remain on the back foot, in anticipation of a weak NFP print.

Looking at USD/JPY’s four-hour chart, the price is running into strong offers at the 21-Simple Moving Average (SMA) at 110.02.     

The currency pair continues to remain confined between 110.10 and 109.79 so far this Friday. The Relative Strength Index (RSI) trades listlessly near 50.00, suggesting that the price could breakout in either direction.

However, the path of least resistance appears to the upside as a dense cluster of healthy support levels is stacked up around 109.90. That level is the confluence of the 50, 100 and 200-SMAs.

On a sustained break below the latter, the daily lows of 109.79 could challenge the bullish commitments.

If the downward pressure intensifies, then USD/JPY could fall further towards the August 30 lows of 109.58.

USD/JPY: Four-hour chart

Alternatively, acceptance above the 21-SMA will revive the bullish interests, calling for a fresh rally towards the September 1 highs at 110.42.

Further up, the 110.50 psychological barrier could offer fresh resistance to the bulls.

USD/JPY: Additional levels to consider