USD/JPY managed to stage a rebound from multi-week lows on Thursday but failed to gather recovery momentum. Economists at  Société Générale note that the pair could see another leg lower on a break under 127.20.

Support 127.20, resistance 129.90

“USD/JPY rebounded towards the upper limit of the steep channel within which recent decline evolved at 131/131.20 (now at 129.90), however, a break is still awaited.”

“Failure to reclaim last week's high of 131/131.20 could mean persistence in decline.” 

“US NFP may test depth of support for stronger Yen and return to a mid-January low of 127.23.”

“Below 127.20, next potential supports are located at 126.50/125.85 representing 2015 high and 124.00.”

See – US NFP Preview: Forecasts from eight major banks, another healthy gain