• USD/JPY recovery fails at 107.15 and the pair struggles to hold above 107.00
  • The Japanese yen prevails on a risk-averse market in spite of a tame dollar rebound after Powell's speech.
  • A decline past 106.60 might weaken the overall upward trend – UOB.

The US dollar recovery attempt witnessed after Fed Powell’s speech has been capped at 107.15. The pair has retreated to 106.88, with the JPY favoured by the overall risk-off mood and is attempting to regain 107.00 at the time of writing.

The Japanese yen prevails on risk aversion

The USD/JPY rebound from 105.98 lows last week was rejected on Monday right below the 108.00 level, and the pair has given away gains over the last two days, returning to levels sub 107.00. The sour market sentiment on growing fears about a second wave of the pandemic and the looming US-China tensions are weighing on the USD in favour of the safe-haven yen.  

The pair attempted to bounce up from session lows at 106.75 on Wednesday, with the USD buoyed by Powell’s comments denying the idea of negative interest rates. The movement lacked strength, however, and the greenback turned back at 107.14, with the yen gaining traction on a risk-averse market.

Key support level at 106.60 – UOB

FX analysts at UOB warn about a slide below 106.60: “While upward momentum has picked up considerably, USD has to clear the 107.80 resistance first before further sustained advance can be expected (next resistance is at 108.50) The prospect for a such a scenario is quite high but in order to maintain the current build-up in momentum, USD should not move back below the ‘strong support’ level at 106.60 within these few days.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Latest Forex News

Editors’ Picks

AUD/USD jumps back above 0.6950 as S&P 500 futures test 3,200

Following a bearish opening gap, AUD/USD has recovered ground and trades above 0.6950, tracking the bounce in the S&P 500 futures. The bulls shrug off US-China tensions and the worsening coronavirus situation in the US and Australia. 


USD/JPY bears holding their positions below 107 level

Yen remains a safe haven currency of choice as trade wars and the coronavirus play havoc risk apatite. Investors pin hopes on Gilead Sciences reporting that its antiviral drug Remdesivir recorded positive results in clinical trials.


Gold: Pierces $1,800 inside short-term bullish flag

Gold prices extend recoveries from $1,798.14, defies two-day losing streak. A seven-day-old bullish technical pattern, sustained trading beyond immediate support favor the buyers. 200-HMA offers additional downside support, bulls will cheer break of $1,811.60.

Gold News

WTI: Depressed above $40 amid output cut talks

WTI defies the late-Friday recovery moves while slipping from $40.80. Saudi Arabia pushes for two million barrels a day output cut, IEA improves on oil demand forecast. Risk-tone remains mildly positive amid virus woes, US-China tension.

Oil News

S&P 500: Bank's earnings in focus, COVID-19 induced insolvency fears simmer away

The S&P 500 will be a key theme on Q2 earnings this week, traders watching the banks for guidance. Wall Street stocks remain in bullish territory, but the S&P 500 is on thin-ice while below the June highs. 

Read more