USD/JPY consolidates around 110.00 mark, NFP awaited

After yesterday's sharp retracement from two-week tops, the USD/JPY pair caught some bids on Friday and remained glued to the key 110.00 psychological mark. 

On Thursday, the pair stalled its strong recovery move from 4-month lows and turned sharply lower following the release of core PCE price index that showed inflation was still well below the Fed's 2% target. 

   •  US: Core PCE price index broadly in line with expectations – Nomura

This coupled with the US Treasury Secretary Steven Mnuchin's comments that a weaker buck may be good for trade further collaborated to the pair's overnight weakness.

   •  US: Taxing times – ANZ

Further downside, however, remained limited amid continuous improvement in investors' risk appetite and easing geopolitical tensions, which was seen denting the Japanese Yen's safe-haven appeal. 

The Japanese Yen was also being weighed by Friday's slightly weaker Japanese manufacturing PMI for August, which helped the pair to regain some fresh traction ahead of the keenly watched NFP report, due later today.

   •  US NFP and ISM Manufacturing amongst market movers today – Danske Bank

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "The short term picture is still marginally positive for the pair, as technical indicators pared losses and are currently aiming to regain the upside, with the Momentum within overbought levels and the RSI around 56. In the same chart, the price holds above its 100 SMA, but failed to hold above a bearish 200 SMA, now the immediate resistance around 110.25. An upward acceleration above  this last should favor a retest of the mentioned high, but it will take a break above 110.94, August 16th high, to confirm a steeper recovery in the days to come."