USD/JPY: 105.80 to cap the dollar's advance

The dollar is firmer this Tuesday as risk-aversion is back in fashion. The USD/JPY pair is up from a daily low of 105.23 though with scarce bullish potential amid the yen’s safe-haven condition, FXStreet’s Chief Analyst Valeria Bednarik reports.

Key quotes

“To the well-known issues regarding a US stimulus package, and the pandemic spreading and delaying the economic recovery, this Tuesday Johnson & Johnson paused the trial of its coronavirus vaccine amid an unexpected illness in one participant. Also, China has reportedly banned imports of Australian coal, leaving some Australian vessels stuck at Chinese ports.”  

“The USD/JPY pair has a limited bullish potential, according to the 4-hour chart, as it’s unable to overcome its 100 SMA, while below the 20 and 200 SMAs. Technical indicators in the mentioned time-frame have recovered from oversold readings, but remain within negative levels with uneven strength.”

“A steeper advance is out of the picture for now, with the next relevant resistance at 105.80, a probable top for today should the greenback continues to advance.”