- USD / JPY accelerates its reversal below 105.00 to reach the 104.55 zone.
- The yen rises on concerns about the coronavirus.
- The dollar remains bullish while it is above 104.40 – UOB.
The USD/JPY It has accelerated its downtrend from the week highs at 105.65 after breaking below 105.00 on Friday and is attempting to hold above the 104.55 / 60 zone. The dollar is cutting gains after Monday’s rally, although it is still on track to close the week up 1.2%.
The yen appreciates in conversions on COVID-19
The Japanese yen – safe haven, has appreciated across the board for the past two days, fueled by market concerns about the economic fallout from the second wave of coronavirus that is hitting the US and Europe. The rapid rise in infections and deaths has dampened enthusiasm for a possible vaccine.
In addition, yields on US Treasuries, one of the main reasons for the dollar rally, have continued to decline, which has affected demand for the USD. The yield on the 10-year US Treasury note fell to 0.88% after peaking at 0.97% on Wednesday, its highest level since the first pandemic outbreak in March.
USD / JPY remains biased to the upside while above 104.40 – UOB
The UOB currency analysis team remains bullish that the USD contemplates a retest of 106.10: “As highlighted, there is room for the current strong advance in the USD to test the main resistance at 106.10.” At this stage, the chances of a sustained increase above this level are not high. On the downside, a breakout of 104.40 (previously ‘strong support’ level at 104.00) would indicate that the USD is not ready for 106.10 “.
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