- USD/JPY extends losses below 107 as risk-off intensifies.
- Yen is gaining ground alongside US dollar on coronavirus fears.
- Losses in S&P 500 futures bodes well for the Japanese currency.
USD/JPY is challenging fresh ten-day lows just below the 107 mark, as the bears remain in command amid intensifying risk-off sentiment.
The downbeat market mood is likely to extend into Europe, as reflected by the accelerating losses in the S&P 500 futures. The fresh leg down in the US stock futures is helping boost the safe-haven bids for the yen, which has prompted USD/JPY to breach the 107 threshold.
Meanwhile, the US dollar continues to attract the safe-haven flows against its main peers, collaborating with the weakness in the major. The record rise in coronavirus cases in the US doused hopes of a V-shaped recovery and spooked the investors.
The US Supreme Court’s rulings about President Donald Trump’s financial records added to the uncertainty around the US pollical scenario and dampened the mood further.
Looking ahead, the pair will remain at the mercy of the risk-off flows and virus updates ahead of the US PPI data.
USD/JPY technical levels
The bears eye immediate downside target at 106.75 (daily classic S3), below which the psychological 106.50 level could be tested. To the upside, 107.25 is the level to beats for the bulls. That level is the confluence of the 5-DMA, daily high and pivot point.
USD/JPY additional levels to consider
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