USD/JPY: On the bids towards 107.00 amid fresh trade/virus worries
- USD/JPY registers three-day winning streak amid risk-off sentiment.
- US VP Pence self-isolating, US-China trade futures in doubt.
- BOJ Summary of Opinions to decorate the calendar.
While extending its previous two-day rise, USD/JPY takes the bids to the intra-day high of 106.90 amid the early Monday morning in Asia. The pair seems to have benefited from the US dollar’s safe-haven demand amid fresh updates concerning the coronavirus (COVID-19) and the US-China trade relations.
Virus infection in the White House?
During the late-Sunday in the US, Bloomberg’s Jennifer Jacobs tweeted that US Vice President Mike Pence is self-isolating away from the White House after an aide was diagnosed with coronavirus on Friday, per several people familiar with the situation.
Following the tweet, Bloomberg mentioned the heads of the US Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention (CDC) were also quarantining after coming into contact with a White House staff member who tested positive for the coronavirus.
This spreads the fears of the virus outbreak in the key US policy structures and weighs on the risks.
Trade tension again in the spotlight…
Even if the US policymakers, coupled with their Chinese counterparts, agreed to remain in communication and cooperation on Friday, as per Xinhua, US President Donald Trump has a different message. As per the Republican leader’s latest comments, he is “having a very hard time with China” and that COVID-19 “sort of overrides so much”. He said, “I’m very torn, I have not decided yet if you want to know the truth.”
Other than the US-China trade war, China is also trying to punish Australia after it lobbied for an inquiry into the COVID-19 outbreak.
As a result, the market’s risk-tone fails to extend the previous day’s run-up with the S&P 500 Futures down 0.25% to 2,920 by the press time.
Looking forward, BOJ’s Summary of Opinions becomes the only event to decorate the economic calendar and hence traders will be more inclined towards virus/trade updates for fresh direction.
Technical analysis
In addition to successfully clearing a five-week-old falling trend line, currently near 106.75, buyers will look for an upside break of 21-day SMA level of 107.15 for fresh entries. Until then, the fears of sub-106.00 return can’t be ruled out.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
