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According to analysts at Citi, monetary and fiscal stimulus are not yet enough to counter the depth and duration of the coronavirus. They still see a case for an overall risk averse backdrop.

Key Quotes: 

“Combination of the Fed “to act forcefully, proactively and aggressively” and do more if needed together with its current policy stance adds to USD headwinds as funding conditions continue to normalize.”

“We conclude that current set of global fiscal/ monetary measures are not yet enough to counter the depth and duration of the public health crisis. There is still a case for an overall risk averse backdrop to continue even if we see tactical bounces seen in risk sentiment from time to time.”

“USDJPY once broke the pivotal 106.92 support but there had been no downside acceleration and it just held at 106.45. We expect the pair will move towards good support in the 104.46-105.07 range after consolidation. Below here and a move towards 101.2 would be the next target. Resistances may find at 108.08 and 109.38 respectively.”