USD/JPY struggles near multi-week lows, bears eyeing 104.00 mark

USD/JPY has now drifted into the negative territory for the third consecutive session on Thursday.
Concerns about rising COVID-19 cases benefitted the safe-haven JPY and exerted some pressure.
A modest pickup in the USD demand might help limit deeper losses ahead of the US Q3 GDP print.

Haresh Menghani FXStreet

The USD/JPY pair extended its steady intraday retracement slide from mid-104.00s and has now dropped back closer to five-week tops set in the previous session.

The pair failed to capitalize on its early uptick, instead met with some fresh supply at higher levels and drifted into the negative territory for the third consecutive session on Thursday. As investors looked past the latest BoJ policy update, the Japanese yen was back in demand amid growing market worries about the ever-increasing coronavirus cases.

It is worth reporting that the JPY weakened a bit during the Asian session after the BoJ lowered its growth and inflation forecasts for fiscal 2020/21 at the conclusion of the October policy meeting. In the post-meeting press conference, the BoJ governor, Haruhiko Kuroda said that the central bank is ready to ease monetary policy without hesitation if needed.

Meanwhile, investors remain concerned that renewed lockdown measures to curb the second wave of the coronavirus infections could derail the tepid global economic recovery. Adding to this, European stock markets pared some of their opening gains, which, in turn, extended some support to the JPY's safe-haven status and prompted fresh selling around the USD/JPY pair.

However, a modest pickup in US dollar demand might help limit any deeper losses, at least for the time being. That said, the uncertain US political environment might hold bulls from placing any fresh bets and cap any attempted recovery for the USD/JPY pair. Hence, a subsequent slide back towards September monthly swing lows, around the 104.00 mark, looks a distinct possibility.

Market participants now look forward to the release of the Advance US Q3 GDP report. Any meaningful divergence from the expected figures will influence the USD price dynamics. This, along with the broader market risk sentiment will be looked upon for some short-term trading opportunities later during the early North American session.

Technical levels to watch

USD/JPY

Overview
Today last price	104.17
Today Daily Change	-0.15
Today Daily Change %	-0.14
Today daily open	104.32

Trends
Daily SMA20	105.27
Daily SMA50	105.53
Daily SMA100	106.11
Daily SMA200	107.17

Levels
Previous Daily High	104.56
Previous Daily Low	104.12
Previous Weekly High	105.75
Previous Weekly Low	104.34
Previous Monthly High	106.55
Previous Monthly Low	104
Daily Fibonacci 38.2%	104.28
Daily Fibonacci 61.8%	104.39
Daily Pivot Point S1	104.11
Daily Pivot Point S2	103.89
Daily Pivot Point S3	103.66
Daily Pivot Point R1	104.55
Daily Pivot Point R2	104.77
Daily Pivot Point R3	104.99

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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