USD/JPY stuck in a tight range above 111

After refreshing its session high at mid-111s, the USD/JPY pair went into a consolidation phase and spent the last couple of hours moving horizontally in a 20-pip range. As of writing, the pair was trading at 111.32, up 0.5% on the day.

Although the greenback caught some fresh bids following the upbeat private sector employment report, it couldn't gather further bullish momentum as the strength of the labor market in the U.S. was not a big surprise to the participants. Furthermore, investors may have decided to wait for tomorrow's non-farm payroll report before making any big trading decisions. Nevertheless, the US Dollar Index was able to recover a portion of the losses from Tuesday and Wednesday. As of writing, the pair was trading at 97.15, up 0.15% on the day.

In the U.S. afternoon, U.S. President Donald Trump announced that the U.S. is withdrawing from Paris climate agreement, but there was no apparent market reaction as a few different reports earlier in the week already had revealed that decision. 

• US Pres. Trump: U.S. to withdraw from Paris Accord

The only data due from Japan on Friday is the consumer confidence, but it's unlikely to create any fluctuations in the pair ahead of the important NFP report from the United States. The non-farm payrolls are expected to ease to 185K in May from 211K in April, and the unemployment level is seen to remain unchanged at 4.4%.

• US NFP: We expect a 185K reading - Wells Fargo

Technical outlook

FXStreet analyst Valeria Bednarik explains that the short-term picture is modestly positive for the USD/JPY pair, as the pair remains near its daily highs, whilst technical indicators in the 4 hours chart stand in positive territory. She further adds that the price remains below its moving averages, and more relevant, the 112.00 level, the 38.2% retracement of the mentioned rally and where the pair met selling interest last week and the US Nonfarm Payroll report will need to surprise big towards the upside to be able to push the pair beyond this last.

According to the analyst, supports could be seen at 111.20, 110.80 and 110.50 while resistances align at 111.60, 112.00 and 112.45.