FxWirePro: USD/JPY recovery capped at 5-DMA, Non-farm payroll effect dampened by Powell's dovish tone

USD/JPY chart on Trading View used for analysis

• USD/JPY is trading 0.27% lower on the day at 108.21 at 0630 GMT.
   
• The pair has largely ignored positive risk sentiment with the Asian markets having bounced higher amid increased expectations of the US-China trade talks.
   
• The nonfarm payrolls (Friday) was a strong result and helped to balance out the outlook for the US economy that has otherwise proven a series of negative data results of late.
   
• However, Powell's dovish commnets on Friday, which suggested that the central bank could pause interest-rate increases if the US economy weakened keeps pressure on the greenback.
   
• Price action was capped at 5-DMA which extends its bearish show with steep downside bias.
   
• We see no major signs of recovery and scope for test of 78.6% Fib. Bearish invalidation only above 200-DMA.

Support levels: 108, 106.75 (78.6% Fib)

Resistance levels: 108.58 (5-DMA), 110.75 (21-EMA)

Data and Major Events to Watch for the Week: 
- US ISM non-manufacturing survey 
- US NFIB small business confidence and trade data
- FOMC meeting minutes
- CPI inflation reading