USD/JPY refreshes session low, below mid-111.00s post-NFP

   •  USD retreats on PBoC’s action to raise reserve required on FX forward trading.
   •  Trade-related headlines prompt some safe-haven buying and add to the selling pressure.
   •  Disappointing headline NFP print does little to revive USD demand.

The USD/JPY pair extended its retracement slide from an intraday high level of 111.88 and refreshed the session lows post-US monthly jobs report. 

After an initial uptick, the pair met with some fresh supply and turned lower for the third consecutive session amid a modest US Dollar retracement. The retracement slide accelerated further after the PBoC announced to raise reserve requirement on FX forwards trading to 20%. 

This coupled with the latest trade-related news, where in China is said to levy differential tariffs on $60 billion worth of US goods, prompted some safe-haven buying and exerted some additional downward pressure. 

The selling bias remained unabated in wake of disappointing headline NFP print, coming in to show that the US economy added 157K new jobs in July as compared to 190K expected and worse than previous month's upwardly revised 248K.

The pair has now slipped back closer to overnight swing lows as bullish traders now look forward to the US ISM non-manufacturing PMI for some immediate respite on the last trading day of the week. 

Technical levels to watch

Immediate support is pegged near 111.20 level and is followed by the 111.00 handle, below which the pair is likely to head back towards testing 110.70-65 support area. On the flip side, 111.65 area now seems to act as an immediate hurdle, above which the pair is likely to aim towards reclaiming the 112.00 handle.