USD/JPY might be in for a bit of consolidation in the trading hours leading up to the US non-farm payrolls release. Another weak figure is expected, as cold weather conditions could weigh on the employment change figure for January.

If that’s the case, the support turned resistance area around the 102.00 major psychological level might hold as a barrier for further rallies. Stochastic is already in the overbought zone, which suggests that dollar bears are ready to push the pair back down.

Shorting at market if the NFP figure comes in below consensus and aiming for the previous lows around 101.00 with a tight 50-pip stop could yield a 2:1 return on risk for a quick day trade.

By Kate Curtis from Trader’s Way