USD/JPY: Recovery stalls just above 106.00 amid persistent USD weakness

USD/JPY erases losses but recovery lacks follow-through.
USD weakness and cautious trading in equities cap the upside.
All eyes on risk trends and US Factory data for fresh impulse.

Dhwani Mehta FXStreet

USD/JPY is attempting a recovery from daily lows of 105.83 but the bulls lack follow-through amid ongoing weakness in the US dollar across its main competitors.

The cautious trading seen in the European equities combined with the drop in the S&P 500 futures also limits the recovery attempts in the spot just above the 106.00 level.

The greenback comeback stalled and the selling bias resumed as the coronavirus resurgence continues to cast a cloud on the economic recovery prospects, especially after the upbeat US ISM Manufacturing PMI threw some rays of hope.

Meanwhile, the impending US fiscal stimulus deal combined with falling US real yields keep the USD sellers alive and kicking.

On the JPY-side of the equation, the yen traders ignored the domestic macro news while drawing some support from the Bank of Japan’s (BOJ) Governor Haruhiko Kuroda’s recent comments.

Kuroda said early Tuesday BOJ may consider extending a March 2021 deadline for lending facilities aimed at channeling funds to companies hit by the coronavirus pandemic. This came amid rising new infections across Japan, with Tokyo – the worst hit.

Next of relevance remains the US Factory Orders and virus data for near-term trading opportunities in the major. The sentiment on the global stocks amid stimulus expectations will also have a significant bearing on USD/JPY.

USD/JPY technical levels

“In a case where the USD/JPY prices cross 106.60, 107.55 and July month top close to 108.15 will grab the market attention. Meanwhile, a daily closing below 10-day SMA level of 105.82 can take rest on 105.30 before revisiting the five-month lows near 104.20,” explains Anil Panchal, FXStreet’s analyst.

USD/JPY additional levels

USD/JPY

Overview
Today last price	105.96
Today Daily Change	0.01
Today Daily Change %	0.01
Today daily open	105.95

Trends
Daily SMA20	106.54
Daily SMA50	107.18
Daily SMA100	107.55
Daily SMA200	108.24

Levels
Previous Daily High	106.47
Previous Daily Low	105.58
Previous Weekly High	106.13
Previous Weekly Low	104.19
Previous Monthly High	108.16
Previous Monthly Low	104.19
Daily Fibonacci 38.2%	106.13
Daily Fibonacci 61.8%	105.92
Daily Pivot Point S1	105.53
Daily Pivot Point S2	105.11
Daily Pivot Point S3	104.64
Daily Pivot Point R1	106.42
Daily Pivot Point R2	106.89
Daily Pivot Point R3	107.31

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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