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  • USD/JPY defies pullback from 107.45 while refreshing in the intraday low.
  • Virus woes, updates concerning Hong Kong keep market sentiment heavy.
  • Japan’s Jibun Bank Services PMI rose to 45 from 26.5 in June.
  • Qualitative catalysts to entertain traders amid a likely inactive day ahead.

USD/JPY refreshes the intraday low to 107.44, before regaining 107.50, as markets in Tokyo open for trading on Friday. In doing so, the yen pair defies the previous day’s positive closing while also keeping its recent trading pattern of staying below 108.00.

Although upbeat US employment data saved the day for the USD/JPY buyer during Thursday, the recent risk-off moves seem to continue favoring the sellers. Among the main negatives were the coronavirus (COVID-19) updates from the US and the global talks over China’s rush to gain more power in Hong Kong.

The US employment report for June came out better than market consensus but failed to keep the traders happy amid fresh virus resurgence in the US likely to weigh on the statistics in the coming months. The headlines Nonfarm Payrolls crossed 3,000K forecasts with 4,800K whereas Unemployment Rate dropped more than 12.3% expected to 11.1%.

The US registered record pandemic cases for the third straight day on Thursday with 52,789 latest numbers. Details suggest that Florida reported 10,109 new cases while Texas marked 7,915 new cases during the previous day. The record surge in the pandemic pushes back the Trump administration’s reopening plans and weighs on the economic sentiment.

Talking about the Hong Kong issue, US Secretary of State Mike Pompeo used twitter to criticize China’s Communist Party’s (CCP) decision on the Hong Kong security law. Further to escalate the global ire against the dragon nation, Hong Kong activist spoke for the betterment of people that will be ruined due to this new law. Crossing both of them was North Korean Ambassador to China Ji Jae-ryong who said supporting China against the US interference into the matter.

Against this backdrop, S&P 500 Futures drop 0.10% to 3,125 whereas Japan’s Nikkei 225 stays sluggish around 22,350 with 0.40% gains.

It should also be noted that recently released data from Japan also failed to offer any clear direction to the USD/JPY prices. Jibun Bank Services PMI for June rose from 26.5 to 45 but was mostly ignored amid broad risk-off sentiment.

Considering the lack of US players, coupled with a light calendar, global markets may witness a dull trading session ahead. However, the recent noises surrounding Hong Kong and virus updates might keep the traders engaged.

Technical analysis

A one-week-old resistance line, previous support, restricts the pair’s immediate upside around 108.00. Meanwhile, 107.00 and June 11 low of 106.57 could question bears before diverting them to the previous month’s low near 106.00.