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  • USD/JPY recovers around 80-90 pips from the early slump to over three-year lows.
  • A combination of factors failed to inspire bulls and should cap any attempted bounce.
  • The price action suggests that the recent bearish pressure might still be far from over.

The USD/JPY pair now seems to have entered a bearish consolidation phase and was seen oscillating in a narrow trading band, well above the 102.00 round-figure mark.

The pair managed to find some support near mid-101.00s and managed to recover around 80-90 pips from the Asian session flash crash to over three-year lows amid extremely oversold conditions on short/medium-term charts.

Bears remain in control amid coronavirus jitters

However, a carnage across the global equity markets – amid growing worries about the uncontained spread of the deadly coronavirus – continued underpinning the Japanese yen’s perceived safe-haven demand and kept a lid on any subsequent recovery.

The global flight to safety was further fueled by a plunge in crude oil prices and led to a historic fall in the US Treasury bond yields, which added to the recent bearish pressure surrounding the US dollar and further collaborated towards capping the pair.

Meanwhile, the pair’s inability to register any meaningful recovery suggests that the near-term selling bias might still be far from being over and warrants some caution for bulls amid absent relevant market moving economic releases from the US.

Technical levels to watch