USD/JPY heads toward the December low at 102.86

The USD/JPY pair is under pressure amid worrisome news spurring risk aversion and is about to challenge the 102.86 December low, Valeria Bednarik, Chief Analyst at FXStreet, reports.

Key quotes

“US Republican Senator Mitch McConnell blocked a move by colleague Bernie Sanders to allow a vote on increasing stimulus checks from $600 to $2,000, adding pressure on the American currency. Also, US Treasury Secretary Steve Mnuchin announced that direct payments of $ 600 would be out as soon as this week.”

“The number of new coronavirus cases is on the rise around the world. Cases of the new strain detected in the UK have been discovered in places as far as Israel and Chile. The death toll is on the rise in Europe, and health systems are stressed in the northern hemisphere.”

“USD/JPY is technically bearish, according to the 4-hour chart, as it accelerated its slump below all of its moving averages, with the 20 SMA turning south below the longer ones. The decline will likely continue, mainly if the pair breaks below this month´s low at 102.86.”