USD/JPY struggles below 104.00 mark amid softer risk tone

  • Optimism over the resumption of US fiscal aid talks assisted USD/JPY to gain some traction.
  • COVID-19 jitters, the downbeat market mood and dovish Fed expectations capped the upside.

The USD/JPY pair traded with a mild positive bias through the Asian session, albeit lacked any follow-through buying and remained capped below the 104.00 mark.

Following the previous day's intraday pullback of around 50 pips, the pair managed to regain some positive traction on Friday and for now, seems to have snapped six consecutive days of losing streak. The uptick was supported by optimism over reports that US Senate Republican and Democrat leaders had agreed to resume negotiations on another coronavirus stimulus package.

That said, a fresh leg down in the US equity markets underpinned demand for the safe-haven Japanese yen and kept a lid on any further gains for the USD/JPY pair. The global risk sentiment took a hit after the US Treasury Secretary Steven Mnuchin requested the Fed to return funds earmarked for COVID-19 lending to struggling businesses, nonprofits and local governments.

This comes on the back of growing market worries about the economic fallout from the imposition of new coronavirus restrictions in several US states and further fueled speculations for additional monetary easing by the Fed. This was evident from the ongoing slide in the US Treasury bond yields, which weighed on the US dollar and collaborated towards capping the USD/JPY pair.

There isn't any major market-moving economic data due for release from the US on Friday. However, developments surrounding the coronavirus saga will continue to influence the safe-haven JPY. This, along with the USD price dynamics should assist traders to grab some short-term opportunities on the last day of the week.

Technical levels to watch


Today last price 103.75
Today Daily Change -0.02
Today Daily Change % -0.02
Today daily open 103.77
Daily SMA20 104.53
Daily SMA50 105.04
Daily SMA100 105.68
Daily SMA200 106.78
Previous Daily High 104.22
Previous Daily Low 103.72
Previous Weekly High 105.68
Previous Weekly Low 103.2
Previous Monthly High 106.11
Previous Monthly Low 104.03
Daily Fibonacci 38.2% 103.91
Daily Fibonacci 61.8% 104.03
Daily Pivot Point S1 103.59
Daily Pivot Point S2 103.4
Daily Pivot Point S3 103.09
Daily Pivot Point R1 104.08
Daily Pivot Point R2 104.4
Daily Pivot Point R3 104.58



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