USD/JPY consolidates near daily highs

 USD/JPY has been consolidating since the beginning of the American session, trading in a range near daily highs. The pair jumped after the release of the US ADP employment report and peaked at 114.74, hitting the highest level since February 15. 

The ADP report showed a gain of 298.000 in private payroll, significantly above the 190.000 expected. The data boosted modestly the US dollar in the currency market, particularly against the yen as US bond yield jump. 

The 10-year US yield reached 2.582%, the highest since December. In Wall Street, equity indexes were little changed. Expectations about a rate hike from the Federal Reserve in March remain high and today’s data gives more arguments for a move. Regarding economic numbers, attention now turns to Friday’s NFP. 

Technical levels 

To the upside, the area around 114.70/75 is becoming a strong barrier that capped the upside today and last week, above that level, attention would turn to 115.00 and then 115.35/40 (Jan 20 & 27 high). On the flip side, support could be seen at 114.15 (Mar 07 high), 113.75 (Feb 20 high), 113.55 (Mar 06 low) and 113.25 (Feb 20 high).