USD/JPY Price Analysis: Erases gains, market looks indecisive

Yen draws bids as gold hits multi-year highs.
Safe havens rise as the US-China tensions escalate.
USD/JPY's daily chart shows indecision in the market.

Omkar Godbole FXStreet Contributor

The anti-risk Japanese yen has picked up a bid alongside losses in gold, a classic haven asset.

Both assets are gaining altitude, possibly due to renewed friction between the US and China over the coronavirus outbreak. The Trump administration's top aide said over the weekend that Beijing sent airline passengers to spread the infection worldwide.

The USD/JPY pair is now trading unchanged on the day at 107.08, having faced rejection at 107.28 a few minutes before press time.

From a technical analysis standpoint, the USD/JPY pair is lacking a clear directional bias. Moreover, long upper and lower wicks attached to the preceding three daily candles are indicative of indecision in the market place.

A convincing move above Friday's high of 107.43 would imply that the period of indecision has ended with the bullish breakout. That will likely yield a re-test of 107.77 - the high hit on May 11.

Alternatively, a move below the May 13 low of 106.74 would confirm a bearish reversal and expose the psychological support of 106.00.

Daily chart

Trend: Neutral

Technical levels

1. R3 107.94
2. R2 107.68
3. R1 107.36
PP 107.11
1. S1 106.78
2. S2 106.53
3. S3 106.21

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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