- USD/JPY pair remained under some heavy selling pressure amid the global flight to safety.
- Collapsing US bond yields, Fed rate cut speculations continued weighing heavily on the USD.
- Bearish traders seemed unaffected by extremely oversold conditions ahead of the NFP report.
The USD/JPY pair lost some additional ground on the last day of the week and tumbled to over six-month lows, below the 106.00 round-figure mark during the Asian session.
The pair added to its recent heavy losses and remained under some heavy selling pressure for the second consecutive session on Friday. The downfall marked the pair's third day of a negative move in the previous four – also the fifth in the last seven – and was sponsored by the coronavirus-led selloff across the global equity markets.
Bears remained in control
Growing market concerns that the virus outbreak will have a bigger than previously estimated impact on the global economy weighed in investors' sentiment. The nervousness was evident from a fresh wave of risk-aversion trade, which provided a strong boost to the Japanese yen's safe-haven status and kept exerting pressure on the major.
Apart from the global flight to safety, firming market expectations that the Fed will again have to cut interest rates by 50 bps for the second time this month resulted into a plunge in the US Treasury bond yields. This eventually aggravated the prevailing bearish pressure surrounding the US dollar and further collaborated to the pair's downfall.
The bearish trajectory seemed rather unaffected by extremely oversold conditions on short-term charts, which might now turn out to be the only factor that might help limit deeper losses, at least for the time being. Market participants now look forward to the closely watched US monthly jobs report for an immediate respite for the USD bulls.
Technical levels to watch
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.
Recommended content
Editors’ Picks
AUD/USD failed just ahead of the 200-day SMA
Finally, AUD/USD managed to break above the 0.6500 barrier on Wednesday, extending the weekly recovery, although its advance faltered just ahead of the 0.6530 region, where the key 200-day SMA sits.
EUR/USD met some decent resistance above 1.0700
EUR/USD remained unable to gather extra upside traction and surpass the 1.0700 hurdle in a convincing fashion on Wednesday, instead giving away part of the weekly gains against the backdrop of a decent bounce in the Dollar.
Gold keeps consolidating ahead of US first-tier figures
Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.
Bitcoin price could be primed for correction as bearish activity grows near $66K area
Bitcoin (BTC) price managed to maintain a northbound trajectory after the April 20 halving, despite bold assertions by analysts that the event would be a “sell the news” situation. However, after four days of strength, the tables could be turning as a dark cloud now hovers above BTC price.
Bank of Japan's predicament: The BOJ is trapped
In this special edition of TradeGATEHub Live Trading, we're joined by guest speaker Tavi @TaviCosta, who shares his insights on the Bank of Japan's current predicament, stating, 'The BOJ is Trapped.'