The USD/JPY pair recorded slight gains on Friday amid feeble trading due to the Independence Day holiday in the US. The US dollar (USD) is stabilizing against the Japanese yen (JPY) after falling sharply on Thursday following worse-than-expected labor market data from the United States (US). At the time of writing, USD/JPY is trading at 161.30, after falling to a two-week low of 160.49 earlier in the Asian session.

The dollar weakened on Thursday after the latest U.S. nonfarm payrolls report missed expectations, signaling a cooling labor market. Softer job creation has reinforced expectations that the Federal Reserve (Fed) may have less room to keep interest rates tight for longer, weighing on U.S. Treasury yields. However, the US dollar later rebounded as traders adjusted positions after the initial sell-off, which helped USD/JPY regain traction.

Short-term technical analysis:

On the 4-hour chart, the USD/JPY rate is 161.29. The pair is hovering around the 100-period uncomplicated moving average (SMA) at 161.29, leaving a near-term neutral bias as price consolidates between nearby levels. The 20-period SMA at 161.91 stands above current price and is acting as animated resistance, suggesting that upside attempts remain circumscribed for now, while the Relative Strength Index (RSI) falling towards the mid-40s indicates that bullish momentum is fading rather than being completely oversold.

Upside, immediate resistance appears at the horizontal barrier near 161.39, ahead of the 20-period SMA cluster near 161.91. On the other hand, first support is seen at 161.12, with additional cushions at 160.90 and 160.79, where the prior horizontal lows and broader trend base converge, and a sustained break below these levels would result in a more decisive bias tilt in favor of the sellers.

(The technical analysis for this story was written with the support of an AI tool.)