Yesterday, the USD/JPY has reversed its last week’s bearish trend on optimism surrounding news about Pfizer’s Covid-19 vaccine optimism. Pfizer and BioNTech’s Covid-19 vaccine found to be 90% effectivein a breakthrough announced by Pfizer’s CEO Albert Bourla, that could make the vaccine available for use by the end of the year, if drug authorities give it the green light.
The USD/JPY pair, considered as a safe-haven asset with GOLD, surpassed the 105.50 resistance but failed to touch the 105.74 price level that could test the current long-term bearish trend.
Japan’s Prime Minister, Yoshihide Suga has warned markets that the appreciation of the Yen could push the Bank of Japan to intervene in the FX marker to decrease the negative impact of continued currency strength on Japan’s economic recovery.
Actually, Japan’s Prime Minister has stressed before a parliamentary committee that a steady exchange rate is particularly important.
In a closer look at the H4 chart, the price has broken above the downward trend-line where there was a significant resistance around the 105.60 – 105.80 level. A close above the downward trend-line may test this level, with the next level of resistance coming in at 106.10 price.
If the pair closes below the downward trend-line may be indicating a continuation of the longer-term bearish move, where a lower move could bring the significant support 105.00 level back into focus. A persistent bearish momentum from there may open the door to 104.00 and 103.20 as levels of support.
Considering the price does not close above the 106.00/ 106.10 level we expect that the pair will continue its downward trend towards the 103.20 support.