USD/JPY dives to session lows, around mid-107.00 ahead of US macro data

  • USD/JPY witnessed a sharp turnaround from three-week tops set earlier this Wednesday.
  • Rising coronavirus cases weighed on the risk sentiment and benefitted the safe-haven JPY.
  • A modest pickup in the USD demand, surging US bond yields did little to lend any support.
  • Investors now look forward to the US macro data, FOMC minutes for fresh trading impetus.

The USD/JPY pair continued losing ground through the mid-European session and slipped below mid-107.00s, or fresh daily lows in the last hour.

The pair failed to capitalize on its early uptick to three-week tops – levels beyond the 108.00 round-figure mark – and witnessed a dramatic intraday turnaround on Wednesday. Investors remain concerned that a surge in new coronavirus cases across the world could trigger renewed lockdown measures to contain the spread and delay the global economic recovery.

This comes amid the risk of a further escalation of diplomatic tensions between the US and China – especially after the latter passed the Hong Kong security law – and dented the global risk sentiment. This was evident from a fresh leg down in the equity markets, which underpinned the safe-haven Japanese yen and prompted some aggressive long-unwinding trade around the USD/JPY pair.

The pair snapped five consecutive days of the winning streak and erased the previous day's positive move. The sharp intraday downfall seemed rather unaffected by a modest pickup in the US dollar demand. A strong uptick in the US Treasury bond yields helped revive the USD demand, albeit did little to impress bullish trader or lend any support to the USD/JPY pair.

Moving ahead, market participants now look forward to the US economic docket – featuring the release of the ADP report on private-sector employment and ISM Manufacturing PMI. This coupled with minutes of the latest FOMC policy meeting will play a key role in influencing the USD price dynamics and provide some meaningful trading opportunities around the USD/JPY pair.

Technical levels to watch


Today last price 107.49
Today Daily Change -0.44
Today Daily Change % -0.41
Today daily open 107.93
Daily SMA20 107.56
Daily SMA50 107.4
Daily SMA100 107.94
Daily SMA200 108.41
Previous Daily High 107.98
Previous Daily Low 107.52
Previous Weekly High 107.45
Previous Weekly Low 106.08
Previous Monthly High 109.85
Previous Monthly Low 106.08
Daily Fibonacci 38.2% 107.81
Daily Fibonacci 61.8% 107.7
Daily Pivot Point S1 107.64
Daily Pivot Point S2 107.35
Daily Pivot Point S3 107.18
Daily Pivot Point R1 108.1
Daily Pivot Point R2 108.27
Daily Pivot Point R3 108.56



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