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  • USD/JPY once again met with some fresh supply near the 107.75-80 region.
  • Concerns about rising COVID-19 cases benefitted the safe-haven Japanese yen.
  • A subdued USD price action did little to influence or lend any support to the pair.

The USD/JPY pair failed to capitalize on its early uptick, rather met with some fresh supply and dropped to session lows, around the 107.45 region in the last hour.

Following the previous day’s intraday pullback from weekly tops, the pair managed to regain some positive traction during the Asian hours on Wednesday but once again struggled to make it through the 107.75-80 supply zone.

Investors remained cautious amid concerns about the ever-increasing number of new coronavirus cases. This coupled with the possibility of renewed lockdown dampened prospects for a sharp V-shaped global economic recovery.

This, in turn, extended some support to the safe-haven Japanese yen and capped any meaningful upside for the USD/JPY pair. Meanwhile, a subdued US dollar demand also did little to impress bulls or influence the price action.

The pair has now retreated around 25 pips from daily tops, albeit remains well within this week’s trading range. This makes it prudent to wait for some follow-through selling before positioning for any further downfall.

There isn’t any major market-moving economic data due for release from the US. Hence, the broader market risk sentiment and the USD price dynamics might continue to play a key role in producing some trading opportunities.

Technical levels to watch