USD/JPY flirts with session lows, around 105.30 region

The emergence of fresh selling around the USD exerted some pressure on USD/JPY.
The risk-on mood, surging US bond yields might help limit losses, for the time being.

Haresh Menghani FXStreet

The intraday USD selling bias picked up pace during the mid-European session and dragged the USD/JPY pair to daily lows, around the 105.30 region in the last hour.

The pair failed to capitalize on its early uptick to three-day tops and witnessed a modest pullback from mid-105.00s amid the emergence of some fresh selling around the US dollar. Expectations of a COVID-19 vaccine by the end of this year dented the greenback's status as the global reserve currency, which, in turn, was seen as a key factor exerting some pressure on the USD/JPY pair.

However, the downside remains cushioned amid the upbeat market mood, which tends to undermine demand for the safe-haven Japanese yen. The global risk sentiment got a strong boost on the back of reviving hopes for additional US fiscal stimulus measures. The risk-on flow was evident from a strong rally in the US Treasury bond yields, which might help limit deeper losses for the USD/JPY pair.

Nevertheless, the pair has now drifted into the negative territory for the second straight session and remains at the mercy of the USD price dynamics/broader market risk sentiment amid absent relevant market moving economic releases from the US.

From a technical perspective, the emergence of some dip-buying on Friday favours bullish traders. However, the lack of any strong follow-through warrants some caution before positioning for any further near-term appreciating move. On the flip side, bearish traders might still wait for a sustained weakness below the key 105.00 psychological mark.

Technical levels to watch

USD/JPY

Overview
Today last price	105.34
Today Daily Change	-0.04
Today Daily Change %	-0.04
Today daily open	105.38

Trends
Daily SMA20	105.46
Daily SMA50	105.77
Daily SMA100	106.39
Daily SMA200	107.38

Levels
Previous Daily High	105.46
Previous Daily Low	105.19
Previous Weekly High	105.8
Previous Weekly Low	105.04
Previous Monthly High	106.55
Previous Monthly Low	104
Daily Fibonacci 38.2%	105.29
Daily Fibonacci 61.8%	105.36
Daily Pivot Point S1	105.23
Daily Pivot Point S2	105.07
Daily Pivot Point S3	104.96
Daily Pivot Point R1	105.5
Daily Pivot Point R2	105.61
Daily Pivot Point R3	105.77

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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