USD/JPY: Free fall to 105.00 on sluggish US recovery
|The dollar is likely to remain weak until the US economy resumes stronger recovery. Resistance at 106.00 capped the USD/JPY rally after better than expected US payrolls provide respite for the greenback on Friday and remains strong, FXStreet’s analyst Joseph Trevisani reports.
Key quotes
“Markets will now have to decide if the July payrolls were the confirmation of a deepening slowdown, a normal deceleration from June’s torrid hiring pace or a one-month reflection of the already retiring Covid-19 surge in June and early July.”
“If US statistics point to a resumption of the pace in May and June then the dollar will soon adopt that energy and rally. Absent that improvement the greenback will continue to sag even though the recovery in Japan is likely to be even weaker and more questionable”.
“Resistance at 106 is the immediate consideration. If that holds there is limited support to 105.00 and little beneath. The area above 106, especially above 106.50 occupied trading for four months and is replete with resistance and then support lines.”
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