USD/JPY: Three-day downtrend tests 109.00 as Japan aims to extend virus-led emergency

USD/JPY bounces off intraday low, drops for the third consecutive day.
Japan government looks set to extend and expand the state of emergency on Friday.
Risk dwindles as pre-NFP caution joins virus woes to battle vaccine hopes, receding reflation fears.

Anil Panchal FXStreet

Despite recently bouncing off intraday low, USD/JPY stays pressured around 109.00 as markets in Tokyo opens for Friday’s trading. In doing so, the yen pair justifies the coronavirus (COVID-19) fears at home as well as the typical pre-NFP trading lull.

As per Kyodo News, “The Japanese government is set Friday to expand the ongoing COVID-19 state of emergency beyond Tokyo and the Osaka region and extend it to the end of May in a bid to bring down infection cases and ease the strain on hospitals.” The report also mentions Japan’s 4,375 new infections on Thursday as down 27% versus the fourth wave peak marked last Saturday.

It should be noted that the US and European Union’s (EU) support to waive IP protections to the covid vaccines join the Fed policymakers’ rejections of reflation fears and tapering talks, except for Dallas Fed President Robert Kaplan, to test pessimism. Also on the risk positive side could be the recently upbeat US data flashing early signals for today’s US employment figures.

Read: US Nonfarm Payrolls April Preview: When the economy booms, it's all about rates

Amid these plays, Japan’s Nikkei 225 drops 0.11% while S&P 500 Futures and US 10-year Treasury yields stay sluggish ahead of the key US data.

Looking forward, Japanese Prime Minister Yoshihide Suga’s emergency announcement, around 10:00 GMT, will be the key but not more important than the US jobs report for April.

Technical analysis

A bearish crossover of 21-day SMA and 50-day SMA suggests further downside of the USD/JPY prices towards 108.35-30 support-zone ahead of directing bears to April’s low near 107.50. Meanwhile, buyers will not risk entries until witnessing a clear break of 109.80.

Additional important levels

Overview
Today last price	109.02
Today Daily Change	-0.07
Today Daily Change %	-0.06%
Today daily open	109.09

Trends
Daily SMA20	108.76
Daily SMA50	108.86
Daily SMA100	106.57
Daily SMA200	105.86

Levels
Previous Daily High	109.43
Previous Daily Low	109
Previous Weekly High	109.37
Previous Weekly Low	107.64
Previous Monthly High	110.85
Previous Monthly Low	107.48
Daily Fibonacci 38.2%	109.16
Daily Fibonacci 61.8%	109.27
Daily Pivot Point S1	108.92
Daily Pivot Point S2	108.75
Daily Pivot Point S3	108.49
Daily Pivot Point R1	109.34
Daily Pivot Point R2	109.6
Daily Pivot Point R3	109.77

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

EUR/USD trims gains, back below 1.1800

EUR/USD now loses some upside momentum, returning to the area below the 1.1800 support as the Greenback manages to regain some composure following the SCOTUS-led pullback earlier in the session.

GBP/USD off highs, recedes to the sub-1.3500 area

Following earlier highs north of 1.3500 the figure, GBP/USD now faces some renewed downside pressure, revisiting the 1.3490 zone as the US Dollar manages to regain some upside impulse in the latter part of the NA session on Friday.

Gold climbs to weekly tops, approaches $5,100/oz

Gold keeps the bid tone well in place at the end of the week, now hitting fresh weekly highs and retargeting the key $5,100 mark per troy ounce. The move higher in the yellow metal comes in response to ongoing geopolitical tensions in the Middle East and modest losses in the US Dollar.