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USD/JPY rebounds above 107.50, looks to end week in red

  • Dow Jones Industrial Average gains nearly 2% on Friday.
  • US Dollar Index remains on track to close week below 100.
  • CB Leading Economic Index for US declined to 104.2 in March.

The USD/JPY pair dropped to a daily low of 107.31 during the early trading hours of the American session but staged a modest rebound in the last hour. As of writing, the pair was down 0.33% on a daily basis at 107.58 despite the upbeat market mood. For the week, the pair is down around 80 pips.

USD weakness caps the pair’s rebound

Earlier in the day, the data published by The Conference Board revealed that the Leading Economic Index for the US fell by 6.7 points to 104.2 in March to post its biggest monthly decline. Commenting on the data, “the unprecedented and sudden deterioration was broad based, with the largest negative contributions coming from initial claims for unemployment insurance and stock prices,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board.

Despite the disappointing data, Wall Street’s main indexes extended the rebound on Friday boosted by revived hopes of the US economy moving closer to reopening and Remdesivir being used as a treatment for COVID-19 symptoms. At the moment, the Dow Jones Industrial Average and the S&P 500 are both up around 2% on the day while the Nasdaq Composite is underperforming by adding 0.15%. 

Meanwhile, after posting decisive gains in the last two days and climbing above the 100 handle, the US Dollar Index (DXY) lost its traction on Friday to make it difficult for the pair to gather recovery momentum. Although the DXY remains in the negative territory near 99.75 on the daily chart, it remains on track to register modest weekly gains.

Technical levels to watch for

 

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