• USD/JPY snaps two-day drop amid mixed sentiment.
  • US President Trump’s blame-game failed to get verification, virus antibody adds strength to risk reset.
  • Japanese banks are off for Children's Day.

Following its bounce from 106.60, USD/JPY seesaws around 106.75 during the early Tuesday morning in Asia. That said, the pair registered losses during the previous two days as risk-off sentiment gained support from the US.

In addition to alleging that researches in China’s Wuhan laboratory were the cause of the coronavirus (COVID-19) outbreak, US President Donald Trump also flashed trade war signals off-late. The Republican leader’s comments challenging the US-China trade deal were the latest catalysts to the market’s risk-tone.

However, the World Health Organization (WHO) defied any such claims by saying it didn’t receive any such proof from the US. The news paused the previous risk-off sentiment.

Also challenging the mood was an update from the Sky News that reads, "Scientists have discovered an antibody which prevents the coronavirus from infecting human cells in ‘groundbreaking research’ which could lead to the development of new treatments.”

Additionally, Reuters tally suggesting a drop in the rate of virus-led fatalities have also helped to portray the risk reset.

As a result, Wall Street managed to close Monday’s trading session on the positive side, despite initial losses, whereas S&P 500 Futures flash mild gains amid the first few minutes.

Given the Golden Week holiday period in Japan, US Treasury yields may be less volatile and so does the USD/JPY pair. However, updates concerning the virus and US-China trade war could keep the markets active.

Technical analysis

An eight-day-old falling trend line near 107.20 restricts the pair’s immediate recoveries ahead of 21-day SMA around 107.60. As a result, sellers can keep targeting April lows near 106.35 during the further downside.

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content

Recommended content

Editors’ Picks

EUR/USD edges lower toward 1.0100 after dismal EU sentiment data

EUR/USD edges lower toward 1.0100 after dismal EU sentiment data

EUR/USD has extended its daily slide below 1.0150 after the data from Germany and the EU showed that the Economic Sentiment Index component of the ZEW Survey continued to decline in August. Investors await July housing data from the US.


GBP/USD extends slide toward 1.2000 after UK data

GBP/USD extends slide toward 1.2000 after UK data

GBP/USD came under renewed bearish pressure in the early European session amid risk aversion on Tuesday and declined toward 1.2000 before staging a modest rebound. The data from the UK showed that the ILO Unemployment Rate remained unchanged at 3.8% in June.


Gold struggles to recover above $1,780

Gold struggles to recover above $1,780

Following a consolidation phase above $1,780 in the Asian session, gold lost its traction and declined toward $1,775. The benchmark 10-year US Treasury bond yield holds in positive territory near 2.8%, making it difficult for XAU/USD to gather recovery momentum.

Gold News

Bitcoin price all but confirms a bearish breakout amid opposing on-chain metrics

Bitcoin price all but confirms a bearish breakout amid opposing on-chain metrics

Bitcoin price shows a confluence of bearish developments that suggests an incoming downtrend. This development could halt the bullish outlook seen in Ethereum and other related altcoins. Bitcoin price is in a classic Wyckoff Distribution Phase.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!