USD/JPY: Bears in control near 4.5-month low under 105.00

  • USD/JPY drops to the lowest levels since March 12, 2020.
  • Japan flashes softer than expected and prior Unemployment Rate, upbeat Industrial Production for June.
  • Uncertainty over the fiscal package, Presidential election and virus woes recently weighed on the US dollar.
  • The second-tier data from Japan and America will join risk catalysts to direct near-term pair moves.

USD/JPY declines to 104.70 as Tokyo markets open for trading on Friday. The yen pair prints a seven-day losing streak while taking rounds to the multi-day low. While the broad US dollar weakness is the major reason for the pair’s south-run, the recently published Japanese data add strength to the pair bears.

Nothing for the bulls…

In addition to the broad risk-off mood and the greenback’s selling, upbeat statistics from Japan also close door on the face of the bulls.

Recently, Japan’s June month Unemployment Rate slipped past-3.1% forecast and 2.9% prior to 2.8% whereas the preliminary readings of Industrial Production recovered from -8.9% previous contraction to +2.7% versus +1.2% forecast. It’s worth mentioning that the US second quarter (Q2) GDP slumped to -32.9% compared to -34.1% forecast and -5.0% previous readouts during the previous day.

Talking about the risk, the rapid increase in the coronavirus (COVID-19) wave 2.0 becomes the key reason backing the traders' rush to risk-safety. While updates from Texas become the latest, Tokyo’s above 360 numbers also make it the case worth observing. Elsewhere, US policymakers are jostling with the much-awaited fiscal aid package. Policymakers earlier signaled a deal on the unemployment claim benefits and probably mild agreement on the broad package but news off-late defies any optimism concerning the same.

Also joining the league of market challenges is US President Donald Trump’s push for a delay in the November month’s Presidential Election while citing mail-in ballots.

Amid all these catalysts, US 10-year Treasury yields trying to recover from the previous day’s plunge to March month lows, also the record bottom, while S&P 500 Futures mark 0.50% gains to 3,265 by the press time.

Looking forward, Japan’s housing and consumer confidence figures might entertain short-term traders before highlighting sentiment data from the US. However, major attention will be given to the risk factors, mainly the virus updates, US election updates, fiscal news, etc.

Technical analysis

10-day EMA near 105.60 will precede June month’s bottom close to 106.10 while challenging the pair’s near-term recovery, if any. Until then, 104.50 and 104.00 could lure the sellers ahead of highlighting March 12 low of 103.08.

Additional important levels

Today last price 104.69
Today Daily Change -0.04
Today Daily Change % -0.04%
Today daily open 104.73
Daily SMA20 106.69
Daily SMA50 107.25
Daily SMA100 107.57
Daily SMA200 108.27
Previous Daily High 105.3
Previous Daily Low 104.68
Previous Weekly High 107.54
Previous Weekly Low 105.68
Previous Monthly High 109.85
Previous Monthly Low 106.08
Daily Fibonacci 38.2% 104.92
Daily Fibonacci 61.8% 105.06
Daily Pivot Point S1 104.51
Daily Pivot Point S2 104.29
Daily Pivot Point S3 103.9
Daily Pivot Point R1 105.12
Daily Pivot Point R2 105.52
Daily Pivot Point R3 105.74



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