USD/JPY: Selling opportunities in sight

USD/JPY has resumed the leg lower in the second half of the week, trading below the 107.00 mark and closer to Wednesday’s YTD low at 106.84. Pablo Piovano, an analyst at FXStreet, sees chances to sell in occasional rallies. 

Key quotes

“The resumption of the risk aversion in combination with weaker US yields is favouring the demand for the safe-haven JPY, always against the broader backdrop of unremitting concerns surrounding the COVID-19.”

“Further easing either by the Fed or other central banks cannot be ruled out, leaving the outlook for the pair somewhat mixed and with the next relevant support in the mid-106.00s.”

“Occasional rallies in USD/JPY are seen struggling in the 108.35/40 band, where is located the 200-day SMA. By the same token, further weakness is thus expected to materialize when below this key barrier.” 

“The next support of relevance emerges at the October 2019 low in the 106.50 zone ahead of 105.05. On the upside, the pair needs to regain the 200-day SMA, today at 108.37, in order to allow for extra gains.”