Home Forex Market Analysis Forex Signals USD/JPY Examines Double Bottom – Update On Signal!

USD/JPY Examines Double Bottom – Update On Signal!

40
0

Today in the early European trading session, the USD/JPY currency pair succeeded to stop its previous 4-day losing streak and rose above mid-105.00 marks mainly due to the broad-based U.S. dollar strength, buoyed by the hopes of U.S. fiscal stimulus package, which eventually pushed the U.S. Treasury bond yields higher and contributed to the currency pair gains. On the other hand, the concerns about the worsening US-China relations might underpin the safe-haven Japanese yen, which becomes the key factor that cap the currency pair further gains. At this moment, the USD/JPY currency pair is currently trading at 105.44 and consolidating in the range between 105.22 – 105.69

Despite concerns about the ever-increasing coronavirus cases across the world and worsening US-China relations, the investors continued to cheer the hopes of U.S. fiscal stimulus package and optimism over a potential vaccine for the COVID-19. However, the fresh updates that the U.S. policymakers have moved closer to agreeing on the next fiscal stimulus package helped the USD maintain its gains.

The U.S., Senate Republicans introduced a $1 trillion COVID-19 aid package that would include $1,200 payments to U.S. citizens, as well as incentives for the manufacture of personal protective equipment in the United States, rather than China. It is worth mentioning that this package also includes $190 billion in loans for small businesses and $100 billion in loans to businesses that operate seasonally or in low-income areas. However, these hopes kept the equity market positive on the day.

Apart from this, the surge in coronavirus cases continues to gain pace, especially in the United States. As a result, the investors remain worried that the intensifying virus cases could undermine the economic recovery, which eventually fueled the Fed’s expectation of more stimulus. As per the latest report, the number of coronavirus infections has crossed almost 16.30 million across the world, whereas more than 650,000 people have died globally, as per the Johns Hopkins University. Whereas, the California coronavirus cases increased by at least 10,549 on Monday to 463,439 total, which now crossed Massachusetts’ record in total COVID-19 deaths.

Apart from the virus woes, the long-lasting tussle between the world’s two largest economies remains on the cards as the U.S. is increasing its aerial surveillance over the South China Sea to a record level to keep watch on China following China ordered the closure of the U.S. office in Chengdu, a tit-for-tat reply for the United States’ previous move over the Chinese office closure in Houston. However, these worsening updates give some support to the safe-haven Japanese yen and become the key factor that kept checking any additional gains in the currency pair. On the other hand, the Japanese LDP group is considering to impose restrictions on Chinese apps also adds a burden on the risk-tone.

As in result, the broad-based U.S. dollar flashed green and reported gains on the day. However, the gains in the U.S. dollar could be short-lived or temporary due to the worries that the economic recovery in the U.S. could be stopped in the wake of the resurgence in coronavirus cases. However, the gains in the U.S. dollar kept the GBP/USD currency pair under pressure. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies recovered 0.04% to 93.773.

In the absence of the major data/events on the day, the market traders will keep their eyes on the USD price dynamics and coronavirus headlines, which could play a key role in influencing the intraday momentum. As well as, the traders will keep their eyes on the news concerning U.S.-China.


The USD/JPY is trading with a bearish bias at 105.175 level, closing of candles below this level may drive selling bias 104.520. By the time we entered below signal, the market was suggesting buying trend, but now it seems like it’s going against us. Let’s open buy trade with a stop loss at

Entry Price – Sell 105.606

Stop Loss – 105.106

Take Profit – 106.106

Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +4600

Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368

Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

LEAVE A REPLY

Please enter your comment!
Please enter your name here