USD/JPY struggles near 4-1/2 month lows, below mid-104.00s

USD/JPY remained under some heavy selling pressure for the seventh consecutive session.
The prevalent bearish sentiment around the USD was seen as a key factor exerting pressure.
Growth concerns, fiscal impasse, declining US bond yields continued weighing on the buck.
Extremely oversold conditions helped the pair to hold above 104.00 mark, at least for now.

Haresh Menghani FXStreet

The USD/JPY pair maintained its offered tone through the early European session and was last seen trading near the lowest level since March 12, below mid-104.00s.

The pair added to its recent losses and continued losing ground for the seventh consecutive session on Friday amid the prevalent bearish sentiment surrounding the US dollar. Against the backdrop of a more dovish FOMC statement on Wednesday, doubts over the US economic recovery continued exerting some heavy pressure on the greenback.

Investors remain worried that the economic recovery in the US could be grinding to a halt in the wake of the continuous surge in new coronavirus cases. The market concerns were further fueled by Thursday's advance US GDP report, which showed that the economy contracted by a record 32.9% annualized pace during the second quarter of 2020.

Adding to this, the impasse over the next round of the US fiscal stimulus further pressured the already weaker greenback. Congressional Republicans and Democrats have been struggling to reach a consensus on fiscal spending plans ahead of the expiry of the existing enhanced unemployment provisions on Friday.

Bearish traders further took cues the ongoing slide in the US Treasury bond yields. However, a modest uptick in the US equity futures undermined the Japanese yen's safe-haven status. This, in turn, assisted the USD/JPY pair to find some support ahead of the 104.00 round-figure mark, at least for the time being.

Market participants now look forward to the US economic docket, featuring the release of Core PCE Price Index, Personal Income/Spending data, Chicago PMI and Revised Michigan Consumer Sentiment. The data might influence the USD price dynamics, which along with the broader risk sentiment might produce some short-term trading opportunities.

Technical levels to watch

USD/JPY

Overview
Today last price	104.36
Today Daily Change	-0.37
Today Daily Change %	-0.35
Today daily open	104.73

Trends
Daily SMA20	106.69
Daily SMA50	107.25
Daily SMA100	107.57
Daily SMA200	108.27

Levels
Previous Daily High	105.3
Previous Daily Low	104.68
Previous Weekly High	107.54
Previous Weekly Low	105.68
Previous Monthly High	109.85
Previous Monthly Low	106.08
Daily Fibonacci 38.2%	104.92
Daily Fibonacci 61.8%	105.06
Daily Pivot Point S1	104.51
Daily Pivot Point S2	104.29
Daily Pivot Point S3	103.9
Daily Pivot Point R1	105.12
Daily Pivot Point R2	105.52
Daily Pivot Point R3	105.74

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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