USD/JPY hovers around 109.50, up 0.26% despite risk-off market sentiment
- USD/JPY recovers from yesterday, gains 0.29%.
- Japan’s spike in covid-19 cases weighs on the Yen.
- Despite US 10-year Treasury yields down, the US dollar rises.
The USD/JPY reverses yesterday’s losses, gains 0.26% and trades around 109.51. Despite the risk-off market sentiment and flight to safe-haven assets, the greenback is pairing losses against the Japanese yen.
Japan’s recent rise in covid-19 cases urged the government to extend its state of emergency in the capital Tokyo and seven more prefectures. The decision was due to expire on August 31, however, as infections increase the decision could extend the lockdown until September 12. In regards to the Middle-Eastern conflict, the capital of Afghanistan, Kabul, remains under the control of the Taliban thus increasing tension in the country.
On the other hand, the US 10-year Treasury yields are at 1.247%, down 0.82% in the session. Meanwhile, the US dollar index advances 0.53% at 93.11.
USD/JPY technical outlook
The USD/JPY is up around 109.50. The moving averages support an uptrend. The shorter time frame moving average is above the longer time frames MA’s, which means the medium-term trend is up. Earlier in the Asian session, the pair trended down, however, the fall was capped at around 109.11, then the price bounced back to 109.50. RSI is at 45.32 and leaning upwards, while the Average True Range (ATR) is 55 pips flattish.
Resistance: 109.65 (100-DMA), 110.00/110.20 (50-DMA), 110.79 (August 11 high) .
Support: 109.00, 108.71 (August 4 low), 108.50/108.55 (May 19, 21, 25 lows).