- A good recovery in dollar demand helped the USD / JPY.
- Cruce remains despite the decline in Treasury bonds.
He USD / JPY maintained its bullish and recovery tone from lows in a month in the European session and reached 104.97, Set a new high for the day. Then it stabilized and for hours it has been operating around 104.90, validating daily gains.
After the fall on Friday, the pair managed to regain momentum on the first day of a new week and was being supported by a good recovery in demand for the US dollar.
The growing market concern about the continued increase in new cases of coronavirus in Europe and the United States could hamper global economic recovery. This, in turn, benefited the dollar’s status as a global reserve currency and extended some support to the USD / JPY pair.
Meanwhile, concerns about the imposition of stricter lockdown measures to curb the second wave of COVID-19 cases, coupled with receding hopes of a tax deal before the election, weighed on investor sentiment.
In this context, the yen should have favored but it was not the case. A drop in the correlation between Treasury bond yields and USD / JPY is looming in the market. Today the first setbacks and the second rise. Last week USD / JPY closed at a loss, despite bond yields having the largest rise since August.
From a technical point of view, USD / JPY has improved the context, especially as long as it remains above 104.70. But to aim for more raises it must first break through 105.00 and then the resistance at 105.10. Once consolidated on the latter, further increases in the dollar could be expected. In the opposite direction, 104.55 is the first major support protecting last week’s low at 104.30.
Technical levels
.
Credits: Forex Street
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
