During Wednesday's Asian trading session, the USD/JPY currency pair failed to stop its previous session losing streak and dropped to near two-week lows, below the mid-107.00 level, mainly due to the broad-based U.S. dollar weakness triggered by the possibility of a very dovish outlook from the Fed. On the other hand, the risk-on market sentiment undermining the safe-haven Japanese yen demand and contributed to the currency pair declines. As of writing, the USD/JPY currency pair is currently trading at 107.30 and consolidates in the range between the 107.28 - 107.88.
Despite the on-going tussle of the United States and the United Kingdom against China, the global risk sentiment remained well backed by expectations that the worst of the coronavirus pandemic was over and growing hopes for a sharp V-shaped recovery for the global economy which eventually weakness the Japanese yen's perceived safe-haven status and provide support to the major.
At the USD front, the broad-based U.S. dollar drew offers around the lowest since early-March as traders awaiting details from the U.S. Federal Reserve policy meeting. It should be noted that the Fed will likely announce measures to control the recent rise in bond yields, which will likely push the dollar down further. Whereas, the U.S. dollar index, which tracks the greenback against a basket of six other currencies, was bearish by 0.1% at 96.233, around levels not seen since early March.
Daily Support and Resistance
Pivot Point 108.74
The USD/JPY pair is trading at 107.365, and it's expected to find immediate support at 107.130 level While bearish breakout of this level can extend selling until 106.500 support zone. The 50 periods exponential moving average and the RSI both are in favor of selling bias today. On the higher side, the major resistance will be seen around 108.450 level today. Let's closely monitor 107.100 level to take a buy above and a sell below this level today. Good luck!