USD/JPY awaits firm direction to extend recovery moves beyond 108.00
- USD/JPY fails to hold onto the recent recovery gains, capped in a range.
- The broad US dollar strength ignored worrisome Jobless Claims, virus data.
- US President Trump’s tweets, concerning likely Saudi-Russia pact, triggered fresh risk-on.
- Japan’s Jibun Bank Services PMI will be the immediate catalyst, US data, COVID-19 will be important.
USD/JPY maintains the 107.80 to 108.10 range, established since the late-US session, while taking rounds to 107.85 amid the early Asian session on Friday. The yen pair seems to await fresh clues to extend the previous risk-off amid the broad US dollar strength.
Risk-on or risk-reset?
Although US President Donald Trump’s tweet propelled the global market’s trade sentiment, the same were the latest defied by the Russian spokesperson. Additionally, the coronavirus (COVID-19) figures are also performing their routine duty to spread pessimism with infected cases crossing one million mark, as well as more than 50,000 deaths, across the globe.
Also doubting the risk recovery is US Jobless Claims that marked another horrible outcome in millions, 6648K versus 3500K expected.
Even so, the US 10-year treasury yields close Thursday while reversing most of the early-day losses to 0.61% whereas Wall Street benchmarks also marked gains over 1.5% each.
Moving on, Japan’s Jibun Bank Services PMI for March, expected 32.7 versus 46.8 prior, will be the immediate catalyst for the pair ahead of the US economic data. It’s worth mentioning that the March month jobs report might weigh a little less in importance than the ISM Non-Manufacturing PMI this time. The reason could be the timing of the data collection compared to the virus outbreak in the US.
Amid all this, updates concerning the disease as well as any signals for a cure, like the latest suggesting the second human trial of the vaccine in Spring, will be the key to watch.
Technical analysis
Not only a 200-day SMA level of 108.35 but a confluence of 50-day and 100-day SMAs between 108.80 and 109.00 could also question the pair’s pullback.