- The Fed announced a slew of new programs and exerted some bearish pressure on the USD.
- A solid bounce in the US equities dented the JPY’s safe-haven demand and helped limit losses.
- USD/JPY continues to attract some dip-buying and seems poised to extend its positive move.
The USD/JPY pair tumbled over 100 pips in the last hour, albeit it quickly recovered slightly thereafter and has now moved back above the key 110.00 psychological mark.
The pair managed to stage a goodish recovery from an intraday low level of 109.67, albeit struggled to capitalize on the move and failed ahead of the 111.00 round-figure mark amid some renewed US dollar weakness.
In its latest efforts to ease concerns over tightening liquidity conditions, the Fed on Monday announced a slew of new programs, including open-ended asset purchases aimed at helping markets function more efficiently amid the coronavirus crisis.
The USD witnessed some broad-based selling in reaction to the announcement, albeit a turnaround in the global risk sentiment undermined the Japanese yen's safe-haven demand and helped limit deeper losses for the major.
Meanwhile, the emergence of dip-buying at lower levels supports prospects for an extension of the recent recovery move from multi-year lows. Hence, some follow-through strength, back towards the 111.00 mark, remains a distinct possibility.
Technical levels to watch
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