The US dollar was higher against the yen on Tuesday as it was trading nearly 1% stronger at around 108.60 during the US session. However, this was the only major pair where the greenback was actually stronger as both the EURUSD and GBPUSD pair were seen half a percent higher, while the US dollar was down 1% against commodity-linked currencies.
Earlier, President Donald Trump’s vowed to deploy large numbers of troops if cities and states don’t act to contain violence from the ongoing riots. Moreover, China had ordered U.S. soybean purchases to be halted, which sent equities lower, but the dip was quickly bought.
World stock markets have rallied nearly 36% from March lows on hopes for a swift recovery from a pandemic that has killed almost 375,000 people and crushed global growth as countries shut down to try and slow the virus’ spread.
The USDJPY pair seems to be getting the steam from the never-ending rally in equities as indices are pushing toward all-time highs. It appears that the USDJPY pair is ignoring lower US yields, Fed's money printing, and weaker greenback elsewhere.
The pair is now fighting for the 200-day exponential moving average at 108.40. If it settles above this level, we could see a quick march toward the 110.00 level.
Alternatively, intraday support seems to be near previous highs at 108.00.
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