USD / JPY Analysis

USD / JPY Analysis

The USD / JPY has been fighting at the lowest level since March 13, below the 105.00 level. - USD / JPY fell in the fifth consecutive session of the US dollar on Wednesday. - The deterioration of US-China relations provided additional support to JPY, the safe haven. - Investors are looking forward to the FOMC policy decision for a new momentum. The USD / JPY pair remained depressed during the early European session and traded below the lowest 105.00 level since March 13. The US dollar was not able to take advantage of the previous day's recovery initiative and approached the two-year low. This was seen as one of the key factors behind the negative move in the fifth consecutive session of the USD / JPY pair. The stalemate in the next phase of the US fiscal stimulus package is based on the expectations of a potential change in the Fed's monetary policy stance. Investors are concerned that the economic recovery in the US will come to a halt after the rebound in coronavirus cases. This increases speculation that the Fed will further encourage the economy to support it. From a technical point of view, the weakness below 105.00 may have prepared the ground for extending the downward trend. The Fed is expected to keep policy measures unchanged at the end of a two-day meeting Wednesday, and therefore the key focus will be on interest rate disclosure. Forward guidance will play an important role in influencing near-term USD price dynamics and will provide a new steering force for the USD / JPY pair.