USD/JPY clings to modest recovery gains just above 109.00 mark, lacks follow-through
|- USD/JPY built on the overnight recovery from three-week lows and edged higher on Friday.
- Improving risk sentiment weighed on the JPY’s safe-haven status and remained supportive.
- The uptick lacked any strong buying interest and warrants some caution for bullish trades.
The USD/JPY pair climbed back above the 109.00 mark during the Asian session on Friday, albeit lacked any strong follow-through buying interest.
The pair caught some fresh bids on the last trading day of the week and built on the previous session's late recovery move from three-week lows amid a turnaround in the global risk sentiment, which tends to undermine the Japanese yen's safe-haven demand.
USD/JPY supported by receding fears of coronavirus
The World Health Organization (WHO) on Thursday declared the coronavirus a global health emergency but also backed China's efforts to contain the outbreak. This calmed fears of a global pandemic and helped revive investors' appetite for perceived riskier assets.
Apart from a modest risk-on flow, bullish traders further took cues from a strong pickup in the US Treasury bond yields. This coupled with a mildly positive tone surrounding the US dollar further collaborated to the pair's follow-through recovery on Friday.
Despite the positive move, the pair remained well below weekly tops and capped below 50-day SMA resistance. Hence, it will be prudent to wait for some follow-through strength beyond the mentioned hurdle before positioning for any further appreciating move.
Later during the early North-American session, the US economic docket – featuring the release of Personal Income/Spending data, Core PCE Price Index and Chicago PMI – will now be looked upon to grab some short-term trading opportunities.
Technical levels to watch
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