USD/JPY flirts with a potential firm break under 105.00
USD/JPY sellers have been slowly pushing the agenda for a continued move lower this week, keeping below 106.00 initially before testing waters under 105.50 and now looking for added momentum to try and hold a break under the 105.00 handle.
Granted, the weaker dollar across the board isn't helping but this is part and parcel to that story as well. Going by the chart itself, there is little in the way of a larger drop in USD/JPY towards the March lows - from a technical perspective at least.
Treasury yields keeping on the lower side of its trading range since April is also helping to keep the narrative in favour of yen buyers for now. That remains a spot to watch in case it starts to become a more focal point in markets once again down the road.
Another wildcard is the worsening coronavirus situation in Japan, as that will play a role in impacting domestic conditions; a possible tailwind for the yen too.
Elsewhere, the dollar is also keeping weaker against the likes of the euro and pound. EUR/USD is up slightly to 1.1750 while GBP/USD is still looking perky near 1.2950.
On the latter, there is little in the way from a push towards 1.3000 next with the March high @ 1.3200 certainly a plausible target if you're going by the chart on its own.
As for the day ahead, the Fed is the key risk event on the agenda today although they are likely to just reaffirm a wait-and-see mode. That should lead the decision announcement and press conference to lean more towards being non-events but let's see if Powell & co. will surprise markets heading into the second-half of the week.
