USD/JPY struggles to extend its recovery beyond 104.40

USD/JPY recovery attempt from 104.10 low stalls below 104.40.
The Japanese yen remains bid on a risk-off market.
USD/JPY is risking to break below the 104.00. level – Commerzbank.

Guillermo Alcala FXStreet

The US dollar is attempting to pick up after having dropped to a five-week low at 104.10 against the Japanese yen earlier on Wednesday. The pair, however, remains unable to get past 104.40, and remains dangerously close to multi-month lows at 104.00.

The Japanese yen appreciates on a risk-off session

The greenback heading south for the third consecutive day, with the safe-haven yen appreciating across the board amid a strong risk-averse mood. Equity markets are going through significant declines as COVID-19 infections surging in the US and in Europe.

News that France and Germany are considering new lockdowns has boosted concerns about the potential damage to the incipient economic recovery triggering a rush to safety that has boosted demand for the Japanese yen.

Furthermore, the uncertainty about the US elections is contributing to curb appetite for risk. The market anticipates Biden’s victory, yet, with the distance between the two main candidates tightening in the polls, investors are turning increasingly cautious, fearing sharp price moves as the elections approach.

USD/JPY at risk of breaking 104.00 support – Commerzbank

From a technical point of view, Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, sees the USD/JPY likely to extend its decline below 104.00: “USD/JPY came under pressure again, it remains capped by the three-month downtrend at 105.70 and the focus is on the 104.00 September low. This together with the 200-month ma at 103.93 guards the 103.43/78.6% Fibonacci retracement which is the last defence for the 101.18 March low.”

Technical levels to watch

USD/JPY

Overview
Today last price	104.27
Today Daily Change	-0.14
Today Daily Change %	-0.13
Today daily open	104.41

Trends
Daily SMA20	105.33
Daily SMA50	105.57
Daily SMA100	106.13
Daily SMA200	107.2

Levels
Previous Daily High	104.89
Previous Daily Low	104.39
Previous Weekly High	105.75
Previous Weekly Low	104.34
Previous Monthly High	106.55
Previous Monthly Low	104
Daily Fibonacci 38.2%	104.58
Daily Fibonacci 61.8%	104.7
Daily Pivot Point S1	104.24
Daily Pivot Point S2	104.06
Daily Pivot Point S3	103.74
Daily Pivot Point R1	104.74
Daily Pivot Point R2	105.07
Daily Pivot Point R3	105.24

Author

Guillermo Alcala

FXStreet

Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.

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