- USD / JPY bounces from 104.00, capped below 104.75
- The dollar is consolidating losses with investors in a cautious frame of mind.
- The break of 104.00 could accelerate the downtrend of the USD.
The US dollar is trading slightly negative against the Japanese yen on Friday, with the pair rebounding from a low of 104.00 on Thursday stuck below 104.75.
The dollar consolidates losses in a cautious market
The dollar has been moving back and forth within previous ranges on Friday, unable to make a significant recovery from a key support level at 104.00. Growing concerns about the economic impact of the second round of closings in Europe and the cautious mood of the market anticipating a contested election in the US is keeping USD / JPY bulls at bay.
On the macroeconomic front, the optimistic data on US personal income and expenses, which have shown higher than expected increases in September, have been practically ignored by the markets.
USD / JPY downtrend could accelerate below 104.00
A technical outlook shows the pair is neutral, short-term with downside risks, according to FXStreet principal analyst Valeria Bednarik, who points to key support at 104.00: “The 4-hour chart shows that it was unable to hold ground. above a bearish 20 SMA, currently below it. The 100 and 200 SMAs maintain their bearish slopes well above the shorter one, all indicating prevailing selling pressure. Technical indicators, meanwhile, remain neutral, with no clear directional force. The pair has bottomed around 104.00 in September, and once again in October, with a break below the region opening the doors for a more pronounced decline. ”
Credits: Forex Street
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