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USD/JPY has retreated from around the 38.2% retracement of its latest daily slump and now trades below the 23.% retracement of the same slump, this last at 104.50. The pair is biased lower amid a persistent dismal mood and could break below 104.00 in the near-term, FXStret’s Chief Analyst Valeria Bednarik reports.

More – USD/JPY: Yen to win the battle of the safe havens – Rabobank

Key quotes

“The sour sentiment fuels demand for the Japanese currency ahead of US Federal Reserve Chief Powell’s testimony before Congress. Powell is due to testify on the CARES Act before the House Financial Services Committee, although the document has already been released. According to it, the economy is showing a ‘marked improvement,’ but the future is highly uncertain and depends on controlling the coronavirus pandemic. It also shows that Powell will refer to the need for more help from Congress.”

“The USD/JPY pair is biased lower according to the 4-hour chart, as it’s now developing below a firmly bearish 20 SMA. The larger moving averages also head lower although far above the shorter one, while technical indicators maintain their bearish slopes within negative levels.” 

“The 104.00 level is the immediate support, with a steeper decline expected on a break below it.”