USD/JPY ticks lower on broad USD weakness, trades below 107

USD/JPY edges lower pressured by risk-off market environment.
Major European equity indexes suffer heavy losses on Tuesday.
USD struggles to find demand as investors wait for FOMC Chairman Powell's speech.

Eren Sengezer FXStreet

The USD/JPY pair lost around 50 pips on Tuesday and stayed relatively quiet near 107.20 during the first half of the day on Wednesday. However, with risk-off flows starting to dominate financial markets, the JPY gathered strength as a safe-haven and dragged the pair lower. As of writing, USD/JPY was down 0.21% on the day at 106.92.

Earlier in the day, the Current Index and the Outlook Index of Eco Watchers Survey released by Japan's Cabinet Office came in slightly better than expected but failed to help the JPY.

Investors remain cautious on Wednesday

Heightened concerns over a possible second coronavirus wave seem to be weighing on the sentiment. At the moment, Germany's DAX 30 Index and the Euro Stoxx 50 Index are losing 1.22% and 1.35%, respectively.

Despite the sour market mood, the USD is staying on the back foot for the second straight day on Tuesday. Ahead of FOMC Chairman Powell's speech on the state of the US economy, the US Dollar Index down 0.3% at 99.70.

Previewing Powell's speech, “he will likely repeat his general pledge to act whenever needed and that is priced in," noted FXStreet analyst Yohay Elam. "If he goes into specifics and about fresh ideas to stimulate the economy and mentions numbers, the dollar could drop and stocks to rise.”

Technical levels to consider

USD/JPY

Overview
Today last price	106.92
Today Daily Change	-0.22
Today Daily Change %	-0.21
Today daily open	107.14

Trends
Daily SMA20	107.16
Daily SMA50	107.59
Daily SMA100	108.55
Daily SMA200	108.26

Levels
Previous Daily High	107.7
Previous Daily Low	107.12
Previous Weekly High	107.07
Previous Weekly Low	105.99
Previous Monthly High	109.38
Previous Monthly Low	106.36
Daily Fibonacci 38.2%	107.34
Daily Fibonacci 61.8%	107.48
Daily Pivot Point S1	106.94
Daily Pivot Point S2	106.75
Daily Pivot Point S3	106.37
Daily Pivot Point R1	107.52
Daily Pivot Point R2	107.89
Daily Pivot Point R3	108.09

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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