- USD/JPY regains positive traction on Monday amid a pickup in the USD demand.
- Reviving safe-haven demand underpinned the JPY and capped any strong gains.
The USD/JPY pair traded with a mild positive bias through the early North-American session and was last seen trading around the 107.80 region.
The pair managed to regain some positive traction on the first day of a new trading week and recovered a part of the previous session’s modest pullback. The uptick marked the third day of a positive move in the previous four and was sponsored by a goodish pickup in the US dollar demand.
Despite a steady decline in the number of new coronavirus cases and death, investors remain concerns over the economic fallout from the pandemic. Market worries were further aggravated by a downward spiral in crude oil prices, which benefitted the USD’s status as the global reserve currency.
This comes amid a fresh wave of the global risk-aversion trade, which was evident from a weaker trading sentiment around the equity markets. The risk-off mood underpinned the Japanese yen’s safe-haven demand and turned out to be the only factor that seemed to cap any strong gains for the pair.
Hence, it will be prudent to wait for some a sustained strength beyond the 108.00-108.10 supply zone before traders start positioning for any further near-term appreciating move. In the absence of any relevant market moving economic releases, the pair remains at the mercy of the broader market risk sentiment and the USD price dynamics.
Technical levels to watch
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