USD/JPY consolidated near 3-1/2 week tops, NFP awaited

   •  Persistent USD buying interest supportive of the strong up-move.
   •  Risk-on moods denting JPY’s safe-haven appeal.
   •  Traders seemed to await the release of US NFP report for fresh impetus. 

The USD/JPY pair now seems to have entered a bullish consolidation phase and was seen oscillating within a narrow trading range, just above mid-113.00s, or 3-1/2 week tops.

The pair built on Wednesday's rebound from the 112.00 handle and gained strong positive traction for the second straight session amid persistent US Dollar buying interest. Against the backdrop of Wednesday's upbeat ADP report on the US private sector employment, the passage of a legislation to temporarily fund the US government through December 22 provided an additional boost to the greenback.

Meanwhile, the market largely negated today's better-than-expected Japanese GDP print, with the prevalent risk-on environment, as depicted by strong gains across European equity markets, was seen weighing on the Japanese Yen's safe-haven appeal and remained supportive of the pair's up-move to its highest level since mid-November.

Bulls now seemed to take a breather and look forward to the keenly watched US monthly jobs report, popularly known as NFP, for some fresh impetus. Apart from the headline figures, the focus would also be on average hourly earnings growth, which might now turn out to be a key determinant of the pair's movement ahead of next week's FOMC meeting.

Technical levels to watch

A follow-through buying interest beyond 113.70 level now seems to pave the way for an extension of the pair's upward trajectory even beyond the 114.00 handle towards its next hurdle near the 114.20-25 region.

On the flip side, any meaningful retracement below 113.30 level now seems to find support near the 113.00 handle, which if broken could drag the pair back towards 112.60 horizontal support.