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USD/JPY awaits fresh clues to take out 109.00 amid broad risk aversion

  • USD/JPY fails to keep the bounce off three-week low, Coronavirus fears dominate trade sentiment.
  • WHO’s a mildly positive statement, despite ringing global emergency alarm, triggered recent pullback.
  • Japan’s data dump, the US PCE, Chicago PMI and Michigan Consumer Sentiment decorates the economic calendar.

USD/JPY trades near 108.95, following its recovery from three-week low 108.58, during the early Asian morning on Friday. While fears of China’s coronavirus outbreak justifies the pair’s earlier drop, the World Health Organization’s (WHO) measured response to terming it as an international emergency seems to have triggered the latest bounce. Trades will now keep eyes on Japan’s key data for immediate direction.

Coronavirus is an international health emergency but no need for a travel/trade ban…

WHO finally respected the global push to term China’s lethal virus as a global health emergency. However, the Geneva-based institute refrained from entertaining the key economies’ recent travel/trade ban with Beijing. It was also mentioned that no death due to the virus outside China also makes them confident.

Read: Breaking: Coronavirus is an international health emergency

The Chinese contagion has so far claimed 212 lives and affected more than 8,000 people, crossing SARS that ruined 2002/03.

Traders seem to give a little respect to the US GDP data amid soft Personal Consumption expenditure.

That said, the risk-off continues to be the major market theme with the US 10-year Treasury yields refreshing the lowest point since October 10 to 1.534%, recently bounced off to 1.59%. Wall Street seems to have benefited from the latest WHO announcement and results from the giants while avoiding a negative closing.

January month inflation data joins Unemployment Rate, Retail Sales and Industrial Production for December to form Japan’s data dump. While inflation numbers are likely to stay unchanged, likely recovery in Retail Sales and Industrial Production will confront an expected rise in the Unemployment Rate to 2.3%.

Technical Analysis

100 and 200-day SMAs limit the pair’s immediate declines around 108.70 and 108.40 while buyers will look for entry beyond a 21-day SMA level of 109.35.

 

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