USD/JPY seesaws around 107.50 after downbeat Japan data, risk reset prevails

  • USD/JPY remains stuck in a choppy range between 107.55 and 107.62.
  • Japan’s Industrial Production joined downbeat employment data for May.
  • Market sentiment remains mildly positive following upbeat US data.
  • Virus woes, Hong Kong issue can entertain traders ahead of the US Fed Chair’s testimony.

USD/JPY keeps the intraday range around 107.50, currently at 107.60, as markets in Tokyo open for trading on Tuesday. The yen pair earlier surged to the highest in three weeks but eased during the late-US session on Monday. The weakness, however, couldn’t last long as the quote seesaws in a small area since the start of the Asian session.

Talking about the catalysts, the US data triggered risk rest at the week’s start despite looming concerns over the coronavirus (COVID-19). Though, the optimism confronted downbeat comments from the World Health Organization (WHO) and sluggish data from Japan.

Japan’s May month Unemployment Rate rose more than 2.8% forecast to print a 2.9% mark. Further, the preliminary readings of May month Industrial Production slumped 25.9% versus 11.3% prior YoY expectations. It’s worth mentioning that the ratio of Jobs to Applicants also deteriorated from 1.23 market consensus to 1.2.

Read: Japanese data dump: Markets unfazed while USD/JPY consolidates strong rally

WHO Director-General Tedros Adhanom Ghebreyesus recently crossed wires, via The Hill, while suggesting that the pandemic is speeding up. The key global personality earlier said about the COVID-19 that “the worst is yet to come”. His comments seemed to have taken clues from the recent surge in the US virus cases and fears of another Wuhan like disease outbreak in China. Talking about the figures from Tokyo, Monday’s 58 cases flash the fourth day of rising numbers in Japan’s capital.

Other than the virus woes, US Secretary of State Mike Pompeo’s announcement to end controlled defense exports to Hong Kong also challenges the latest risk-on mood. Additionally, prepared remarks of the testimonies from the Fed Chair Jerome Powell and Treasury Secretary offer an extra challenge to the current trading sentiment by flashing mixed signals.

Amid all these catalysts, S&P 500 Futures stay modestly positive around 3,050 whereas US 10-year treasury yields remain stuck around 0.63%. Further, Japan’s Nikkei prints over 1.5% gain to 22,350 as we write.

Looking forward, China’s official PMIs and housing market data could entertain the traders ahead of the US Chicago Purchasing Managers’ Index, Consumer Confidence and testimonies by the US Fed Chair Powell as well as Treasury Secretary Mnuchin. While most forecast suggests continuation of the market’s mood and a sustained USD/JPY upside, fears of the pandemic could continue weighing on the pair.

Technical analysis

The pair’s recovery moves from the monthly low aim for 100-day EMA near 107.85. However, 108.00 round-figure and 200-day EMA surrounding 108.25 could question further upside. Meanwhile, the bears are less likely to enter unless witnessing a clear break below May month’s low of 105.99.

Additional important levels

Today last price 107.61
Today Daily Change 0.03
Today Daily Change % 0.03%
Today daily open 107.58
Daily SMA20 107.59
Daily SMA50 107.4
Daily SMA100 107.95
Daily SMA200 108.4
Previous Daily High 107.88
Previous Daily Low 107.04
Previous Weekly High 107.45
Previous Weekly Low 106.08
Previous Monthly High 108.09
Previous Monthly Low 105.99
Daily Fibonacci 38.2% 107.56
Daily Fibonacci 61.8% 107.36
Daily Pivot Point S1 107.12
Daily Pivot Point S2 106.66
Daily Pivot Point S3 106.27
Daily Pivot Point R1 107.96
Daily Pivot Point R2 108.35
Daily Pivot Point R3 108.81



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