USD/JPY: Break below 104.65 to open the door for a steeper slide

The USD/JPY pair has lost the 105.00 mark, as the broad dollar’s weakness coupled with plummeting equities. The bearish breakout exposes the 104.00 ar  |  21/10/2020 11:56

The USD/JPY pair has lost the 105.00 mark, as the broad dollar’s weakness coupled with plummeting equities. The bearish breakout exposes the 104.00 area, Valeria Bednarik, Chief Analyst at FXStreet, informs.

Key quotes

“The market keeps waiting for news related to a US coronavirus aid package.  Late Tuesday, talks between Democrat Nancy Pelosi and Treasury Secretary Steven Mnuchin ended without a deal, but with both confident on progress. Talks will continue this Wednesday, although chances of a deal before the November 3 election are still quite a few.”  

“The dollar fell on optimism and remained under pressure despite the market’s mood took a turn for the worst within London trading hours, as Brexit jitters weighed on sentiment. European indexes trade in the red, further fueling USD/JPY’s decline. The pair is pressured despite Treasury yields extended their weekly advance on hopes for a stimulus deal.”

“The bearish breakout sees USD/JPY at its lowest for this October, and at risk of falling further. The 4-hour chart shows that the pair developing well below all of its moving averages, with the 20 SMA turning south. Technical indicators, in the meantime, maintain their strong bearish slopes near oversold readings.” 

“The next relevant support level is 104.65, with a break below it opening the doors for a steeper decline in the near-term.”

 

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