- USD/JPY came under some fresh selling pressure on Friday amid weaker risk sentiment.
- The USD struggled to preserve its early positive move and added to the bearish pressure.
- Technical selling below 107.00 mark further seemed to have aggravated the selling bias.
The USD/JPY pair weakened further below the 107.00 round-figure mark and refreshed daily lows during the early European session.
The pair failed to capitalize on the previous day’s solid intraday recovery move from six-week lows and met with some fresh supply on the last trading day of the week. The pair struggled to find acceptance above 200-hour SMA and started retreating from the 107.40-50 region, amid a further deteriorating in the global risk sentiment.
The latest optimism over the successful stage 1 clinical trial of Gilead Sciences’ antiviral drug remdesivir to treat COVID-19 patients and re-opening of economies in some parts of the world faded rather quickly. This was evident from a fresh leg down in the global equity markets, which underpinned the Japanese yen’s perceived safe-haven demand.
Meanwhile, the risk-off mood-led fall in the US Treasury bond yields kept a lid on the early attempted US dollar recovery move. This, in turn, further contributed to the pair’s pullback. This coupled with possibilities of some short-term stops being triggered on a sustained break below the 107.00 mark aggravated the intraday bearish pressure.
It will now be interesting to see if the pair is able to find any support at lower levels or the slide marks the resumption of the recent bearish trajectory witnessed over the past one week or so. Market participants now look forward to the release of the US ISM Manufacturing PMI for some short-term trading opportunities later during the early North-American session.
Technical levels to watch
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