USD/JPY drops to over two-week lows, further below 107.00 mark
|- USD/JPY remained under some heavy selling for the third consecutive day on Friday.
- Fresh coronavirus jitters benefitted the safe-haven JPY and kept exerting pressure.
- Sliding US bond yields capped the early USD uptick and contributed to the selling bias.
The USD/JPY pair continued losing ground through the mid-European session and dropped to over two-week lows, around the 106.70 region in the last hour.
The pair extended this week's rejection slide from the 107.70-75 supply zone and witnessed some follow-through selling for the third consecutive session on Friday. The downfall was led by the prevalent risk-off mood, which tends to benefit the Japanese yen's perceived safe-haven status.
The recent optimism over a swift global economic recovery faded rather quickly after the US reported a record (over 60,000) new coronavirus cases on Thursday. The continuous surge in the number took its toll on the global risk sentiment, which led to a fresh leg down in the equity markets.
The global flight to safety was reinforced by sliding US Treasury bond yields, which capped the early US dollar uptick, rather prompted some selling. A modest USD pullback from daily tops failed to lend any support the USD/JPY pair, or stall the ongoing slide to the lowest level since June 24.
It will now be interesting to see if the pair is able to find any support at lower levels or prolong its bearish trajectory back towards challenging the multi-month lows, around the 106.00 mark. Some follow-through weakness will mark a fresh bearish breakdown and set the stage for further losses.
There isn't any major market-moving economic data due for release on Friday. Hence, developments surrounding the coronavirus saga might continue to influence the broader market risk sentiment and play a key role in producing some meaningful trading opportunities on the last day of the week.
Technical levels to watch
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