USD/JPY: Bias to sell rallies on a daily chart – OCBC

USD/JPY consolidated, after trading sharply lower post-NFP. Pair was last at 147.55 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Near term consolidation on the day

"Carry trade allure is now reduced as softer US data builds the case for Fed to resume rate cut cycle soon while BoJ is likely to continue to hike rate in due course."

"To some extent, political uncertainty (referring to PM Ishiba’s political career/ LDP leadership) and credit rating concerns (dependent on fiscal health) can be supportive of the pair, but 'sell USD' momentum and narrowing UST-JGB yield differentials can also counter."

"Daily momentum shows tentative signs of turning mild bearish though decline in RSI moderated. Near term consolidation; bias still to sell rallies. Support here at 147.10/40 levels (21 DMA, 38.2% fibo), 145.70/90 levels (50, 100 DMAs). Resistance at 149.40/50 levels (200 DMA, 50% fibo retracement of 2025 high to low), 151 levels (recent high)."