USD/JPY exploring levels sub-104.00 amid broad dollar weakness
|- USD/JPY's reversal from 104.80 extends below 104.00
- The US dollar looks vulnerable amid the positive market mood
- The near-term bias is negative and the pair targets 103.50
The US dollar is heading lower against the Japanese yen for the second consecutive day. The bullish reaction from 103.90 lows witnessed earlier on Friday has been capped at 104.20 and the pair retreated to the 104.00 area on the late US trading session.
The positive market sentiment weighs on the USD
The US dollar has depreciated across the board on Friday, weighed by a brighter market mood, amid hopes of a COVID-19 vaccine and the confirmation of Joe Biden’s victory in the US, which has tackled uncertainty about the US Government.
In the macroeconomic front, the upbeat industrial profits by Chinese firms have boosted sentiment on Friday’s early trading, increasing demand for commodity currencies and, thus, contributing to US dollar weakness. The US Dollar Index, as a result, has dropped to 91.75, its lowest level in nearly three months.
USD/JPY: heading towards 103.50
From a technical perspective, FXStreet’s chief analyst, Valeria Bednarik, sees the pair biased lower, targeting 103.50: "The 4-hour chart shows that the USD/JPY pair is trading below all of its moving averages, with the 20 SMA gaining bearish traction after a failed attempt to surpass the 100 SMA. Technical indicators have extended their declines within negative levels, now lacking directional strength but holding around daily lows.”
Technical levels to watch
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