USD / JPY rises further and extends the recovery to the 105.50 area

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  • The USD / JPY rally from Wednesday’s lows of 105.00, extends to 105.50 so far.
  • The dollar is appreciating on risk aversion amid COVID-19 fears and pessimistic data from the United States.
  • USD / JPY: It will probably remain between 105.00 and 106.00 for the next few weeks – UOB

The dollar was strong against the Japanese yen on Thursday after rebounding from the week-long lows just above 105.00 on Wednesday. The pair has appreciated around 0.6% so far, to erase Wednesday’s losses and hit session highs near 105.50.

The US dollar appreciated on risk aversion

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The USD appreciated across the board Thursday, driven by its safe haven status. Growing concerns about tightening restrictions on the coronavirus, as the number of infections increases globally, and the low expectations of a fiscal stimulus deal in the US keep investors away from risk.

Furthermore, macroeconomic data from the United States have failed to brighten spirits. Weekly jobless claims surged beyond expectations last week, adding evidence that the U.S. labor market is losing steam, while New York’s industrial activity disappointed, revealing that the sector is still far off. from the levels it had before the coronavirus shutdown.

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USD / JPY outlook is mixed – UOB

From a longer-term perspective, the UOB currency analysis team sees the mixed pair, likely to remain between 105.00 and 106.00 for the next few weeks: “While the bias is tilting to the downside, the USD has to close down. below 104.70 before a sustained decline. For now, the outlook for such a move is not high, but it would rise rapidly as long as the USD does not move above 105.70 in these few days. ”

Credits: Forex Street

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