USD/JPY drops below 104.00 as President Trump's speech fails to stabilize risk sentiment

USD/JPY is feeling the pull of gravity, tracking losses in the US stock futures.
President Trump's speech fell short of expectations and has bolstered risk aversion.

Omkar Godbole FXStreet Contributor

The bid tone around the anti-risk Japanese yen strengthened, pushing USD/JPY lower from 104.40 to a session low of near 103.30 as risk aversion in the US stock futures worsened following the US President Trump's speech.

During his address to the nation, President Trump said that he will instruct Treasury to defer some tax payments and called on Congress to offer immediate payroll tax relief. Trump also promised to provide $200 billion in additional liquidity in the fight against coronavirus.

Investors, however, were expecting stronger stimulus and sold risk following Trump's speech. The S&P 500 futures, which traded 0.5% lower ahead of President's address, are now reporting a 2.4% drop. Meanwhile, the yield on the US 10-year Treasury note is now down over five basis points at 0.76%.

The worsening of risk aversion has so far boded well for the yen. The pair was already on a weak footing following the rejection at 104.80 in early Asia and is now trading around 104.00, representing a 0.45% drop on the day.

With measures announced by Trump falling short of expectations, both equities and USD/JPY could continue to lose altitude during the day ahead. The increasing prospects of an all-out price war between Russia and OPEC members will likely add to the risk-off tone.

Technical levels

USD/JPY

Overview
Today last price	104.23
Today Daily Change	-0.33
Today Daily Change %	-0.32
Today daily open	104.56

Trends
Daily SMA20	108.53
Daily SMA50	109.05
Daily SMA100	109.01
Daily SMA200	108.29

Levels
Previous Daily High	105.66
Previous Daily Low	104.1
Previous Weekly High	108.58
Previous Weekly Low	105
Previous Monthly High	112.23
Previous Monthly Low	107.51
Daily Fibonacci 38.2%	104.7
Daily Fibonacci 61.8%	105.07
Daily Pivot Point S1	103.89
Daily Pivot Point S2	103.22
Daily Pivot Point S3	102.34
Daily Pivot Point R1	105.44
Daily Pivot Point R2	106.33
Daily Pivot Point R3	107

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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