The USD/JPY pair dropped at the beginning of the week, ending the day in the 103.60 price area. The weak performance of European indexes, which closed mixed and near their opening levels, reflected the bleak market’s attitude.
Traders maintained a careful attitude ahead of the more important events later in the week, while they finish absorbing the latest Covid-19 developments. Worldwide the virus cases have exceeded 95 million, and it seems the situation will worsen before starting to get better. A choppy start to vaccine immunization undermines the sentiment.
The Japanese data released this Monday showed that Industrial Production shrank by 3.9% yearly in November, missing the market’s expectations. Capacity Utilization contracted by 2.9% in the same month. The country will not publish macroeconomic data this Tuesday.
On the technical side. the pair has bottomed at 103.63 for the day, now trading just below the 38.2% retracement of its January’s increase. In the 4-hour chart, the pair is neutral-to-bearish, as the price trades between drifting moving averages, while technical indicators head lower within negative levels, although with uneven strength. The risk of a fresh leg lower will likely increase on a break below 103.50, the immediate support level.
Warning:
Trading on CFDs involves a high level of risk, including full loss of your trading funds. Before proceeding to trade, you must understand all risks involved and acknowledge your trading limits, bearing in mind the level of awareness in the financial markets, trading experience, economic capabilities and other aspects.
Disclaimer:
Market Trends, Charts, Trading Ideas or other information provided by BKFX (Pty) Ltd and/or third parties are not intended as an investment advice and/or recommendation. The information provided is not presented as suitable or based on your specific need. You are responsible for your own investment decisions and you should not trade with money you cannot afford to lose. Any views or opinions presented in this Article are solely those of the author and do not necessarily represent those of the Company, unless otherwise specifically stated. The Company may provide the general commentary which is not intended as an investment advice and must not be construed as such. Seek advice from a separate financial advisor if an investment advice is needed. The Company assumes no liability for errors, inaccuracies or omissions, inaccuracies or incompleteness of information, texts, graphics, links or other items contained within this article/material.