- USD / JPY reversal from 104.80 extends below 104.00
- US dollar looks vulnerable amid positive market sentiment
- The short-term bias is negative and the pair is targeting 103.50
The U.S. dollar it is heading lower against the Japanese yen for the second day in a row. The bullish reaction from the lows of 103.90 witnessed the previous Friday has been limited to 104.20 and the pair falls to the 104.00 zone in the last US trading session.
Positive market sentiment weighs on the USD
The US dollar has depreciated across the board on Friday, weighed down by better market sentiment amid hopes for a COVID-19 vaccine and confirmation of Joe Biden’s victory in the US, which has addressed the uncertainty about the US government.
On the macro front, upbeat industrial earnings by Chinese companies have boosted confidence in early trading on Friday, increasing demand for commodity currencies and thus contributing to the weak US dollar. The US dollar index, as a result, has fallen to 91.75, its lowest level in nearly three months.
USD/JPY: Rumbo a 103.50
From a technical perspective, FXStreet Chief Analyst Valeria Bednarik sees the pair skewed to the downside, targeting 103.50: “The 4-hour chart shows that the USD / JPY is trading below all of its moving averages, with 20 SMA gaining bearish traction after a failed attempt to break above the 100 SMA. Technical indicators have extended their declines into negative levels, now lacking directional strength but holding around daily lows. “