USD/JPY keeps red below 116.50 after ADP report

The USD/JPY pair stalled recovery from three-week lows and ran through some offers after disappointing US private sector employment data. 

Currently trading around 116.35 region, ADP report showed private sector added only 153K new jobs in December, worse than 170K expected and 215K jobs added in November. 

Today’s disappointing report on private sector employment might now raise barriers for the official monthly jobs report (NFP), slated for release on Friday, which would be looked upon to reinforce market expectations of stronger US economic growth and tighter Fed monetary policy stance in 2017. 

Next on tap would be the US ISM non-manufacturing PMI, which is expected to have eased to 56.6 in December from 57.2 recorded in the previous month. 

Technical levels to watch

A follow through buying interest above 117.00 handle has the potential to continue boosting the pair further towards session peak resistance near 117.40-45 region. On the downside, 116.50 level now becomes immediate support, which if broken might drag the pair back below 116.00 handle towards retesting session lows support near 115.65-60 region.