- USD/JPY struggles for clear direction after Friday’s fall.
- Risk-tone begins the week on a cautious note, coronavirus, politics have been the drivers.
- Japan trade data, virus updates will be the keys to watch.
Having snapped the previous two-day run-up on Friday, USD/JPY lacks clear direction while taking rounds to 108.50 during Monday’s Asian session. The latest coronavirus (COVID-19) updates raise doubts on the recent positive market sentiment, backed by the Trump administration’s guidelines to re-open the US economy as well as Remdesivir trial’s progress. Also contributing to the cautious sentiment were the headlines from the UK and Canada.
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As per Reuters’ tally, there have been more than 40,000 deaths and over 744,000 infections in the US by Sunday. The news also cites the rapid increase in the infections and death toll that raises the doubts over US President Donald Trump’s push for economic restart.
Despite giving leeway to the state governors on whether to open the economy or not, US President Trump’s tweets have been pushing for the decision off-late.
On the other hand, UK PM Boris Johnson was cited by The Times as being very cautious about reopening the economy.
Further to challenge the risks was the headline from the Washington Post revealing details of the mass shooting that took lives of more than 10 people, including the gunman, in Canada’s deadliest attack in years.
Amid all these catalysts, S&P 500 Futures drop 0.82% to 2,843 by the press time.
Traders may now wait for Japan’s March month trade balance, expected ¥917.2B versus ¥1109.8B. Also important to watch will be the US President Donald Trump’s comments during the routing taskforce briefings as well as any COVID-19 updates.
200-day SMA, currently near 108.35, acts as an immediate upside barrier whereas the monthly low surrounding 106.90 offers nearby support during the likely short-term range-bound trading.