USD/JPY is currently recovering above the 106.00 threshold after having traded as low as 105.83 but overall maintaining a positive stance. The pair is short-term bullish but capped by selling interest aligned around 106.45, FXStreet’s Chief Analyst Valeria Bednarik reports.
“News that the US Congress has been unable to reach a deal over the next aid-package is hurting the American currency. Meanwhile, coronavirus concerns remain the same. The number of new cases in the US has been receding, but remains around 50K per day.”
“Japan published July Tokyo inflation, which came in better than expected, up by 0.6% YoY, while the core reading surged 0.4%, both better than anticipated. The US session will bring minor figures, June Factory Orders and the August IBD/TIPP Economic Optimism.”
“The 4-hour chart shows that the USD/JPY pair continues to develop above a firmly bullish 20 SMA, while technical indicators resumed their advances within positive levels. Still, the pair remains below a bearish 100 SMA which capped the upside on Monday.”
“Further gains are to be expected only once beyond the 106.45 area, with scope then to advance to the 107.00/10 area.”