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USD/JPY: Limited bullish potential while below 105.80

USD/JPY was unable to extend its gains beyond 105.80, retreating from the resistance area as risk appetite receded. The pair is trading around 150.60, technically neutral, as bullish scope is limited amid dollar’s weakness, FXStreet’s Chief Analyst Valeria Bednarik briefs.

See – USD/JPY to head towards 104.00 on a sustained break below 105.71 – Commerzbank

Key quotes

“US President Trump returned to the White House late Monday, and the focus shifted to a coronavirus relief package. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have been engaged in intensive talks since late last week, trying to agree on another round of fiscal stimulus. So far, they have been unable to announce a deal, although talks continue.”

“Equities advanced early Asia, but the positive momentum faded as Europe came in, amid some discouraging headlines related to Brexit talks. At the same time, US Treasury yields maintain their strength, consolidating at multi-week highs, and limiting the bearish potential of the pair. Japan didn’t publish macroeconomic data today, while the US session will only include a speech from US Federal Reserve Chief’s Powell.”

“The dollar remains weak, which limits the bullish scope, although a break above 105.80 could result in a test of the 106.25 price zone.”

 

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