- USD/JPY regains some positive traction on Monday amid the prevalent upbeat market mood.
- Hopes of a sharp V-shaped global economic recovery remained supportive of the risk-on tone.
- Concerns about risking COVID-19 cases and sustained USD selling capped gains for the major.
The USD/JPY pair trimmed a part of its early gains to three-day tops, albeit has still managed to hold above mid-107.00s through the early European session.
The pair managed to regain some positive traction on the first day of a new trading week and was being supported by the prevalent risk-on mood, which tends to undermine demand for the safe-haven Japanese yen. The global risk sentiment remained well supported by the incoming positive economic data, which has been offering evidence that the worse of the coronavirus pandemic was probably over.
Bulls further took cues from a goodish pickup in the US Treasury bond yields. However, concerns about the continuous surge in the COVID-19 cases across the world held investors from taking excessive risk. Market participants remain worries that the second wave of the coronavirus infections could trigger renewed lockdown measures and put the brakes on economic activity once again.
This coupled with sustained US dollar selling further collaborated towards capping gains for the major, rather prompted some selling at higher levels and led to a modest intraday pullback. Meanwhile, the diverging forces have failed to provide any meaningful impetus to the major, warranting some caution before traders start positioning for the pair's next leg of a directional move.
Market participants now look forward to the US economic docket, highlighting the release of ISM Non-Manufacturing PMI. The data might influence the USD price dynamics and produce some meaningful trading opportunities later during the early North American session.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold reaches to all-time highs near $2,230, US PCE eyed
Gold price appreciates to all-time highs near $2,230 per troy ounce, attempting to continue its winning streak for the fifth successive session on Friday. However, trading volumes are light as market participants are likely observing Good Friday.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.