- The upbeat mood undermined the safe-haven JPY and extended some support to USD/JPY.
- The prevalent USD selling bias seemed to hold investors from placing aggressive bullish bets.
- Worries over deteriorating US-China relations might also collaborate towards capping gains.
The USD/JPY pair traded with a mild positive bias during the early European session, with bulls now looking to reclaim and extend the momentum beyond the 107.00 mark.
Following an early dip to the 106.80 region, the pair managed to attract some buying and moved further away from over two-week lows set on Friday. The modest uptick of around 15-20 pips was exclusively led by the prevalent risk-on environment, which tends to undermine the safe-haven Japanese yen.
Despite worries about the ever-increasing COVID-19 cases across the world, investors seem convinced that the worst of the pandemic was probably over. This comes amid the incoming positive data, which raised hopes of a swift economic recovery and remained supportive of the upbeat market mood.
However, sustained US dollar selling bias held investors from placing any aggressive bullish bets. This coupled with concerns about a further deterioration in diplomatic relations between the US and China might further contribute towards capping any meaningful gains for the USD/JPY pair.
It is worth reporting that the US President Donald Trump on Friday announced that there will be no phase-two trade deal with China in the near future. Meanwhile, China's Foreign Minister was out with some comments in the last hour and said that they will impose sanctions on US lawmakers.
In the absence of any major market-moving economic releases, the USD price dynamics and investors' appetite for riskier assets will play a key role in influencing the USD/JPY pair's momentum. This makes it prudent to wait for some follow-through buying before positioning for any further move up.
Technical levels to watch
|Today last price||106.96|
|Today Daily Change||0.03|
|Today Daily Change %||0.03|
|Today daily open||106.93|
|Previous Daily High||107.26|
|Previous Daily Low||106.64|
|Previous Weekly High||107.79|
|Previous Weekly Low||106.64|
|Previous Monthly High||109.85|
|Previous Monthly Low||106.08|
|Daily Fibonacci 38.2%||106.88|
|Daily Fibonacci 61.8%||107.02|
|Daily Pivot Point S1||106.62|
|Daily Pivot Point S2||106.31|
|Daily Pivot Point S3||105.99|
|Daily Pivot Point R1||107.25|
|Daily Pivot Point R2||107.57|
|Daily Pivot Point R3||107.88|
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