Today in the early European trading session, the USD/JPY currency pair successfully stopped its early-day losses and took some modest bids just below the 107.00 marks. Currently, the USD/JPY is trading at 106.97 and consolidating in the range between 106.72 - 107.00.
The encouraging data from Oxford University's coronavirus vaccine and CanSino Biologics' drug developed in coordination with China's military research unit favored the risk-on market sentiment. The British drugmaker AstraZeneca (LON: AZN) and Oxford University said on Monday that its COVID-19 vaccine induced an immune response in all study participants that received two doses. Elsewhere, Japan passed the usage of dexamethasone in an attempt to offer a variety of cures to the pandemic after earlier passing Gilead's redelivery for the use.
However, the vaccine news suggests that the cure to the pandemic is nearby, which favored the risk sentiment. Besides, there are approximately 16 other vaccines that are in the progress of clinical trials in Australia, France, Germany, India, South Korea, the UK, the US, and China.
At the coronavirus front, the US, pandemic numbers are running fast to reach 4.0 million marks. Whereas, the latest US coronavirus deaths toll increase by at least 1,003 on Tuesday to 141,920 in total, the largest single-day increase since early June. As a result, experts warned that Arizona, Florida, Idaho, Montana, Oklahoma, South Carolina, Tennessee, Texas, Utah, the Virgin Islands, and West Virginia are expected to bear the most deaths. However, the surge in the pandemic numbers from the US keeps the risk-on mood capped.
At the US-China front, the on-going war between the world's top two economies continues to intensify as the Chinese foreign ministry said on the day, confirming its Houston consulate's closure, adhering to the US' demand. As per the ley words, "China strongly condemns this "outrageous" move." As well as, he said, "Urges the US to correct its wrong decisions, or there will be retaliation." After the Global Times Editor, Hu Xijin, tweeted out earlier, "The US asked China to close Consulate General in Houston in 72 hours. This is a crazy move." This renewed tussle becomes a critical factor that capped the upbeat market mood.
Looking forward, the economic calendar is lighter on the day. So the market traders will keep their eyes on the USD price dynamics and coronavirus headlines, which could play a key role in influencing the intraday momentum. The updates concerning the US fiscal package discussions and vaccine news can offer intermediate moves to the precious metal.
Daily Support and Resistance
Pivot Point 106.97
The USD/JPY is taking a sharp bearish turn from 107.250 level to 106.900. The Japanese pair is trading in a symmetric triangle pattern, which is likely to support the USD/JPY pair at 106.800 and resistance at 107.450. The 50 EMA and MACD are both suggesting the selling trend. Typically, the symmetric triangle represents neutral sentiment among traders and, therefore, can break out on either side to continue the trend. Let's keep an eye on the USD/JPY breakout pattern to capture a quick buy or sell. Good luck!