USD/JPY struggles near multi-week lows, just below 103.00 mark

Sustained USD selling bias failed to assist USD/JPY to preserve its early modest gains.
The risk-on mood undermined the safe-haven JPY and helped limit losses for the pair.
The set-up favour of bearish traders and support prospects for further near-term losses.

Haresh Menghani FXStreet

The USD/JPY pair languished near the lower end of its daily trading range, with bears awaiting some follow-through selling below the 103.00 mark.

The pair failed to capitalize on its Asian session uptick, instead met with some fresh supply near the 103.30 region and dropped to near three-week lows on the first trading day of 2021. The intraday pullback of around 30-35 pips was exclusively sponsored by the prevalent bearish sentiment surrounding the US dollar.

The likelihood of additional US financial aid package and expectations that the Fed will keep interest rates lower for a longer period kept the USD depressed through the first half of the trading action on Monday. However, a combination of factors weighed on the Japanese yen and extended some support to the USD/JPY pair.

Investors have been betting on a strong global economic recovery in 2021. This, along with the mass distribution of vaccines, helped offset worries about the new faster-spreading coronavirus strain and remained supportive of the risk-on environment. This was seen as a key factor undermining the safe-haven JPY.

Adding to this, a possible tightening COVID-19 restrictions in Tokyo further held traders from placing any aggressive bets and helped limit deeper losses for the USD/JPY pair, at least for now. That said, the near-term bias remains tilted in favour of bearish traders and supports prospects for further weakness.

Moving ahead, market participants now look forward to the release of final US Manufacturing PMI print for a fresh impetus. Traders might further take cues from the USD price dynamics and developments surrounding the coronavirus saga, which might continue to play a dominant role in influencing the broader risk sentiment.

Technical levels to watch

USD/JPY

Overview
Today last price	102.99
Today Daily Change	-0.26
Today Daily Change %	-0.25
Today daily open	103.25

Trends
Daily SMA20	103.66
Daily SMA50	104.12
Daily SMA100	104.86
Daily SMA200	106.04

Levels
Previous Daily High	103.32
Previous Daily Low	103.25
Previous Weekly High	103.9
Previous Weekly Low	102.96
Previous Monthly High	104.75
Previous Monthly Low	102.88
Daily Fibonacci 38.2%	103.28
Daily Fibonacci 61.8%	103.3
Daily Pivot Point S1	103.23
Daily Pivot Point S2	103.2
Daily Pivot Point S3	103.16
Daily Pivot Point R1	103.3
Daily Pivot Point R2	103.35
Daily Pivot Point R3	103.37

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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