USD/JPY defies pullback from six-month low to attack 104.50 amid Tokyo’s second holiday
- USD/JPY fails to extend recovery moves beyond 104.84.
- Virus woes, Sino-American tension weigh on the risk-tone sentiment.
- Policymakers from the Fed, RBA and ECB speak dovish as hopes of economic recovery wanes.
- Off in Japan, a light calendar can restrict the counter-trend moves unless any surprises.
USD/JPY prints 0.11% intraday losses while declining to 104.53 during the early Tuesday. The yen major dropped to the lowest since March 12 the previous day, before bouncing off 104.00 to close on a positive side near 104.65. Although the US dollar’s broad strength, amid risk-off mood, favored the quote earlier, failures to keep the pullback may join downbeat comments from the Federal Reserve members in pleasing the USD/JPY bears.
Economic optimism fades…
Not before a few days, global markets were cheering hopes of economic recovery after the coronavirus (COVID-19) hit the macros. However, the recent resurgence in the pandemic, mainly in Europe and the UK, probes the bulls.
Also joining the line are the latest comments from the US Secretary of State Mike Pompeo from the United Nations (UN) meet. The Trump administration member thanked, France, Germany and the UK, via twitter, as they backed rejection to China’s claim over the South China Sea.
Elsewhere, the Fed Chair Jerome Powell said, in the first of testimony, that the path ahead of the economy remains “highly uncertainty”. Further, the Federal Reserve Bank of St. Louis President, James Bullard, also spoke dovish on Bloomberg's interview while saying, that the Fed will be much less pre-emptive about hiking rates.
Not only the Federal Open Market Committee (FOMC) members but the decision-makers from the European Central Bank (ECB) and the Reserve Bank of Australia (RBA) also marked their worries in the latest appearances.
As a result, S&P 500 Futures drop for the fifth day in a row to 3,270 as we write.
Given the off in Japan, due to the Autumnal Equinox Day, coupled with an absence of major data/events, the bears are likely to keep the reins until any news on the vaccine erupts.
Technical analysis
Unless breaking above the August month’s low near 105.10, buyers are less likely to re-enter the ring.
Reprinted from FXStreet,the copyright all reserved by the original author.
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