- USD/JPY added to the overnight losses and witnessed some follow-through selling on Wednesday.
- A selloff in the equity markets underpinned the safe-haven JPY and exerted some heavy pressure.
- A strong pickup in the USD demand helped the pair to find some support ahead of the 104.00 mark.
The USD/JPY pair remained depressed through the early North American session, albeit has managed to rebound around 20-25 pips from five-week lows touched earlier this Wednesday.
The pair extended this week's retracement slide from levels just above the key 105.00 psychological mark and witnessed some heavy selling for the second consecutive session. A selloff in the global equity markets forced investors to take refuge in traditional safe-haven assets. This, in turn, boosted the Japanese yen and was seen as a key factor exerting pressure on the USD/JPY pair.
The global risk sentiment took a hit on the back of growing worries about the continuous surge in new coronavirus cases. The US political uncertainty and the lack of progress in the US stimulus talks further dampened the market mood. The global flight to safety was further reinforced by a fresh leg down in the US Treasury bond yields, which contributed to the USD/JPY pair's intraday fall.
However, concerns that renewed lockdown measures to curb the second wave of COVID-19 infections could derail the already fragile economic recovery provided a strong to the US dollar's status as the global reserve currency. A broad-based USD strength helped ease the bearish pressure, rather assisted the USD/JPY pair to find decent support ahead of the 104.00 mark, or September monthly swing lows.
That said, any meaningful recovery still seems elusive amid absent relevant market-moving economic releases. The focus now shifts to the latest monetary policy update by the Bank of Japan (BoJ), scheduled to be announced during the Asian session on Thursday. The BoJ decision, along with developments surrounding the coronavirus saga will now play a key role in influencing the near-term momentum for the USD/JPY pair.
Technical levels to watch
|Today last price||104.34|
|Today Daily Change||-0.07|
|Today Daily Change %||-0.07|
|Today daily open||104.41|
|Previous Daily High||104.89|
|Previous Daily Low||104.39|
|Previous Weekly High||105.75|
|Previous Weekly Low||104.34|
|Previous Monthly High||106.55|
|Previous Monthly Low||104|
|Daily Fibonacci 38.2%||104.58|
|Daily Fibonacci 61.8%||104.7|
|Daily Pivot Point S1||104.24|
|Daily Pivot Point S2||104.06|
|Daily Pivot Point S3||103.74|
|Daily Pivot Point R1||104.74|
|Daily Pivot Point R2||105.07|
|Daily Pivot Point R3||105.24|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.