- USD / JPY posted a good intraday bounce from the two-week lows set earlier this Wednesday.
- The bullish market sentiment weighs on the safe-haven JPY and helps limit the pair’s initial slide.
- A rally in US bond yields has continued to be supportive, while dovish USD demand limits gains.
The pair USD / JPY is up more than 40 pips from intraday lows and it has spiked to new daily highs in the last hour, although it has rapidly retraced some pips since then. At the pair to write, the pair is trading near the 104.70 region, rising around 0.15% on the day.
The pair has been witness a sharp intraday turnaround after an initial drop to the 104.40 region, at fresh two-week lows played at the start of the European session, and has been supported by a combination of factors. The prevailing optimism in the market has weighed on demand for the safe haven Japanese yen, being a key factor that has helped limit the fall of the USD / JPY pair.
The optimism about the launch of coronavirus vaccines occurs amidst developments to accelerate the Stimulus Package for COVID-19 of 1.9 Trillion Dollars of the president of the USA, Joe Biden. This has fueled hopes for a strong global economic recovery and boosted investor sentiment, which in turn has weighed on traditional safe-haven currencies such as the JPY.
The bulls have been inspired in addition to a modest rebound in US Treasury yields., which has been supported by expectations of massive fiscal spending in the US That said, a dovish action in the US dollar price has failed to provide any additional momentum and has limited any uncontrolled bullish movement for the USD / JPY , which warrants some caution before positioning for possible additional gains.
Market participants are now awaiting the US economic calendar, which highlights the publication of the latest consumer inflation figures at the start of today’s American session. Aside from this, broader market risk sentiment and US bond yields could help seize some short-term opportunities.
USD / JPY technical levels
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