USD/JPY Current Price: 107.28
- Japan’s economy minister said that there’s no need to declare the state of emergency again in Tokyo.
- Equities and yields advanced at the beginning of the week as hopes offset bad news.
- USD/JPY returned to its comfort zone around 107.30, bullish potential limited.
The USD/JPY pair returned to its 107.20/30 comfort zone this Monday, helped by the better market mood. The advance, however, was limited as speculative interest was not interested in buying the greenback, instead jumping into high-yielding assets. Equities posted substantial gains across the three major sessions, and even US Treasury yields posted a modest intraday advance. News that new coronavirus cases continue to rise globally were partially offset by headlines indicating that the US FDA approved the Fast Track designation to the joint coronavirus vaccine efforts made by German BioNTech and US pharmaceutical Pfizer.
At the beginning of the day, Japan published the May Tertiary Industry Index, which resulted in -2.1%, improving from -6% in April. This Tuesday, the country will release Industrial Production and Capacity Utilization, both for May. Meanwhile, Japan’s economy minister, Yasutoshi Nishimura, said that there’s no need to declare the state of emergency again in Tokyo.
USD/JPY short-term technical outlook
The USD/JPY pair is technically neutral heading into the Asian session, lacking bullish potential. The 4-hour chart shows that the price is stuck around a flat 100 SMA, while a handful of pips above a still bearish 20 SMA. Technical indicators, in the meantime, have recovered towards their midlines, losing their directional strength. The pair could extend its modest advance in a risk-favorable environment, although a substantial directional movement remains out of the picture.
Support levels: 106.95 106.60 106.25
Resistance levels: 107.65 108.00 108.40
View Live Chart for the USD/JPY
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