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USD/JPY plunged to 104.93 as news that US President Donald Trump and first lady Melania contracted COVID-19 spurred risk aversion. The pair is technically bearish and the slump will likely accelerate once below 104.85, FXStreet’s Chief Analyst Valeria Bednarik briefs.

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Key quotes

“Trump tweeted that he and his wife both quarantine in the White House and he will continue working. US Treasury yields fell with the headlines, stocks turned red and the greenback is down across the FX board.”

“Japanese data was mixed, as the August unemployment rate came as expected at 3%, worse than the previous 2.9%. However, the Consumer Confidence Index improved by less than anticipated in September, printing at 32.7 against the expected 33.8. The focus now shifts to the US Nonfarm Payroll report. The country is expected to have added 850K new jobs in September, weaker than the previous month’s total of 1.37M. However, analysts are also expecting the unemployment rate to have ticked down to 8.2% from 8.4% in the previous month.”

“USD/JPY is technically bearish, although it bounced from the 104.94 daily low to trade around the 50% retracement of its latest daily decline. The 4-hour chart shows that the pair has broken below all of its moving averages, while technical indicators head firmly lower well into negative levels.”

“The 104.85 level is the immediate support, as it stands for the 38.2% retracement of the mentioned slump. Below it, the bearish momentum will likely accelerate, exposing the 104.00 threshold.”