- USD/JPY probes the previous two-day declines.
- Comments from the US President Trump, Fed Cleveland President Mester seem to tame the risk aversion, WHO was the first mover.
- Japanese traders’ reactions, data and coronavirus headlines will be the key.
Following its gradual recoveries from 110.33 during the US session on Monday, USD/JPY remains modestly changed to 110.70 amid the initial Asian session on Tuesday. That said, the pair questions the previous two-day declines, mainly due to coronavirus-led risk aversion, amid mixed messages from the global front.
The US, WHO flash upbeat signals concerning coronavirus…
The rapid increase in coronavirus cases outside China, mainly in Italy, South Korea and Iran, propelled the market’s risk-off during Monday. However, fears of the deadly virus seem to recede inside the dragon nation as many provinces have lowered emergency alerts while few more of the factories restart.
The World Health Organization (WHO) refrained to consider the coronavirus (COVID-19) as the pandemic. The global institution also tweeted the virus to have peaked between late-January and early February.
Also challenging the market’s rush to risk-safety were comments from the Federal Reserve Bank of Cleveland President Loretta Mester and US President Donald Trump. While the Fed Cleveland Chief considers the Chinese virus as a short-term catalyst, President Trump said that the coronavirus is very much under control.
However, Oman announced its first case of coronavirus recently and the risk aversion continues amid the equities ahead of Tokyo open. While portraying the same, the US equity benchmarks turned into the sea of red while the bond yields also dropped to the multi-year lows by the end of Monday’s trading session. It’s worth noting that the S&P 500 Futures drop 3.37% to 3,327 by the press time.
Moving on, traders will now await the return of Japanese traders from the long weekend. In addition to Japan’s reaction to the latest risk-off, a slew of second-tier activity indices from the Asian nation could also entertain the momentum traders. Though, nothing can take place of coronavirus headlines as far as the key catalysts are concerned.
Technical Analysis
A short-term rising trend line since February 03, around 110.30/25 now, could limit the pair’s near-term declines whereas lows marked during April 2019 and on Friday, respectively around 110.85 and 111.15, might guard the immediate upside.
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