- USD / JPY continues to lose ground for the fifth day in a row on Wednesday.
- Concerns about the increase in the number of COVID-19 cases in the US weigh on the USD.
- A softer risk appetite tone benefits the safe haven JPY and contributes to the pair’s selling bias.
The pair USD/JPY moves lower during the European session and has fallen towards the 103.80 region, at levels not seen since last November 9.
The pair has extended its recent pullback from the 105.65-70 resistance zone and has been witnessed some sales for the fifth day in a row on Wednesday. The downward movement is due to a softer tone around the US dollar and a slight deterioration in global risk sentiment, which tends to prop up the Japanese yen as a safe haven.
Concerns about the possible economic consequences of the Imposition of New Coronavirus Restrictions in Several US States they’ve kept the USD bulls on the defensive during the first half of trading action on Wednesday. The USD has seen even more Pressured by Softer US Retail Sales Data Tuesday and the current drop in US Treasury yields.
Meanwhile, the continued increase in COVID-19 cases it has dampened optimism around promising vaccine trials and hurt global risk sentiment. This has been evident by a further downward movement in stock markets, which has led investors towards traditional safe-haven assets such as the Japanese yen, and has put some additional pressure on the USD / JPY pair.
Further, a sustained drop below the 104.00 level appears to have triggered some technical selling and has contributed to the intraday decline in the USD / JPY pair to the lowest level since November 9. Therefore, some continuing weakness towards the 103.35 region, en route to the round level of 103.00 now seems a possibility.
Market participants are now awaiting the release of US housing market data, with building permits and home starts, which could generate some momentum at the start of the American session. This, coupled with developments around the coronavirus saga and broader market risk sentiment, will influence USD and JPY safe-haven price dynamics and could generate some significant trading opportunities around the pair.
USD / JPY technical levels
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