USD/JPY trades with modest losses around 104.40-35 region

Sustained USD selling bias failed to assist USD/JPY to capitalize on its early uptick to the 104.55 area.
COVID-19 vaccine optimism undermined the safe-haven JPY and might help limit losses for the pair.
Investors now eye US Initial weekly Jobless Claims and ISM Services PMI for some trading impetus.

Haresh Menghani FXStreet

The USD/JPY pair witnessed some selling in the last hour and refreshed daily lows, around the 104.35 region amid a broad-based US dollar weakness.

The pair failed to capitalize on its early uptick to the 104.55 region, instead met with some fresh supply and extended the previous day's retracement slide from one-week tops. The bearish pressure surrounding the USD remained unabated through the first half of the trading action on Thursday, which, in turn, was seen as a key factor exerting some pressure on the USD/JPY pair.

Hopes for additional US fiscal stimulus measures to aid the pandemic-hit US economy revived following the release of ADP report on Wednesday. According to ADP, the US private-sector employers added 307K jobs in November as against 410K anticipated and added to growing market worries about the economic fallout from the imposition of recent COVID-19 restrictions in several US states.

That said, the latest optimism over the first approval of a COVID-19 vaccine undermined the safe-haven Japanese yen and might help limit further losses for the USD/JPY pair. It is worth recalling that the UK on Wednesday became the first country to approve a vaccine jointly developed by Pfizer and BioNTech and said to start inoculation of those most as risk early next week.

This makes it prudent to wait for some strong follow-through selling before confirming that this week's bounce from the 103.80 region has already run out of the steam and positioning for any further depreciating move. In the meantime, Thursday's releases of the Initial Weekly Jobless Claims and ISM Services PMI from the US might produce some trading opportunities around the USD/JPY pair.

Technical levels to watch

USD/JPY

Overview
Today last price	104.38
Today Daily Change	-0.13
Today Daily Change %	-0.12
Today daily open	104.51

Trends
Daily SMA20	104.39
Daily SMA50	104.88
Daily SMA100	105.41
Daily SMA200	106.5

Levels
Previous Daily High	104.75
Previous Daily Low	104.23
Previous Weekly High	104.76
Previous Weekly Low	103.68
Previous Monthly High	105.68
Previous Monthly Low	103.18
Daily Fibonacci 38.2%	104.55
Daily Fibonacci 61.8%	104.43
Daily Pivot Point S1	104.24
Daily Pivot Point S2	103.97
Daily Pivot Point S3	103.71
Daily Pivot Point R1	104.76
Daily Pivot Point R2	105.02
Daily Pivot Point R3	105.29

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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