USD/JPY slips back below 116.00 handle

The USD/JPY pair maintained bearish tone during early NA session and has once again slipped below 116.00 handle. 

Today's disappointing ADP report added on to the greenback selling pressure led by less hawkish than expected Fed minutes, which provided an excuse to traders to take some profits off USD long positions. 

The ADP report showed 153K new private sector jobs added in the economy during December, which was well below expectations of 170K. Meanwhile, weekly jobless claims provided some short-lived respite, with a drop to nearly 43-year low level of 235K from previous week's 263K.

Lastly, the US ISM non-manufacturing PMI print for December matched previous month's reading and came-in at 57.2 as against an expected drop to 56.6, but again failed to impress the bulls. At the time of writing, the pair was trading around 115.80-85 band, within striking distance of three-week lows near 115.65 region touched during earlier on Thursday. 

All eyes remain focused on Friday's official jobs report, which would be next important fundamental trigger helping investors to determine the pair's next leg of directional move. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "The pair has turned strongly bearish, at least in the short term, as in the 1 hour chart, the price is well below its 100 and 200 SMAs, both converging with a descendant trend line around 117.20, whilst technical indicators have turned sharply lower within negative territory, after correcting the extreme oversold conditions reached earlier in the day. In the 4 hours chart, technical indicators head sharply lower, resuming their declines after a modest upward correction, whilst the price accelerated below a bearish 100 SMA, all of which supports a bearish extension, particularly on a break below 116.00."