USD/JPY above 107 handle as risk on mood persist ahead of US NFP on Friday

• Risk -on mood persists since Wednesday as the US and China are ready to negotiate.

• The USD/JPY is currently testing the 50-period simple moving average on the daily chart.

The USD/JPY is trading at around 107.08 up 0.27% on Wednesday as fears of trades war between the US and China are fading. Trump says that the US is not in a trade war with China and both parties are considering a diplomatic agreement over the escalation of trade tariffs imposes by one another unilaterally. 

On Thursday stock indices are keeping their gains from the rebound saw on Wednesday. Gold is lower and trading below the $1,330 level and the US Dollar Index is grinding higher trading at around $90.30. Suggesting that the market is optimistic about the trade war conflict. 

The main macroeconomic US indicator will be released on Friday with the Non-Farm Payroll at 12:30 GMT. Traders will closely be watching as the event often provide great volatility. 

USD/JPY weekly chart

The bulls objective is to close the week above 107.03 last week’s high resistance, while bears want to keep the level below the resistance and keep the market in the 104.80-107.00 range and break below the last swing low seen at 104.63.

USD/JPY daily chart

On the daily time frame, the USD/JPY is currently testing the 107.20 level at the 50-period simple moving average which is considered a dynamic resistance. If the level is broken to the upside, the bulls will target the 107.92 swing high established on February, 21. Both the RSI and MACD are constructive to the upside and show building momentum.

USD/JPY 4-hour chart

Initial support is seen in the 106-105.65 region with April, 2 swing low and the 100-period simple moving average dynamic support. Further down, the 105.31 swing low established on March, 27 is also seen as support. A strong break below the level can see a retest of the 104.63 cyclical low.