USD/JPY clings to gains above mid-103.00s, upside seems limited

A modest pickup in the USD demand assisted USD/JPY to gain some traction on Friday.
A pullback in the equity markets, sliding US bond yields might cap gains for the major.

Haresh Menghani FXStreet

The USD/JPY pair edged higher through the early European session and was last seen trading near the top end of its daily range, around the 103.65-70 region.

Following the previous day's consolidative price move near two-week lows, the pair regained traction on the last trading day of the week and was supported by a modest pickup in the US dollar demand. That said, a combination of factors might hold bulls from placing aggressive bets and cap gains for the USD/JPY pair.

A sharp pullback in the equity markets could lend some support to the Japanese yen's relative safe-haven status. Given that a lot of positive news was already priced in the markets, investors opted to take some profits off the table amid renewed concerns about the economic fallout from the ever-increasing COVID-19 cases.

Meanwhile, the global flight to safety was reinforced by a fresh leg down in the US Treasury bond yields. This might keep a lid on any meaningful upside for the greenback. This makes it prudent to wait for some strong follow-through buying before positioning for any further appreciating move for the USD/JPY pair.

Market participants now look forward to the release of the flash version of the US PMI prints for some short-term trading impetus. This, along with developments surrounding the coronavirus saga, will play a key role in influencing the safe-haven JPY and assist traders to grab some short-term opportunities around the USD/JPY pair.

Technical levels to watch

USD/JPY

Overview
Today last price	103.66
Today Daily Change	0.16
Today Daily Change %	0.15
Today daily open	103.5

Trends
Daily SMA20	103.57
Daily SMA50	103.83
Daily SMA100	104.53
Daily SMA200	105.73

Levels
Previous Daily High	103.67
Previous Daily Low	103.33
Previous Weekly High	104.4
Previous Weekly Low	103.53
Previous Monthly High	104.75
Previous Monthly Low	102.88
Daily Fibonacci 38.2%	103.46
Daily Fibonacci 61.8%	103.54
Daily Pivot Point S1	103.33
Daily Pivot Point S2	103.16
Daily Pivot Point S3	102.99
Daily Pivot Point R1	103.67
Daily Pivot Point R2	103.84
Daily Pivot Point R3	104.01

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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