The USDJPY has resumed decline on Wednesday after Tuesday's closed the trading session in positive territory, recovering to 105.23. The increased demand for protective assets, which include the Japanese Yen, demonstrates a continuing nervousness on the financial markets, coupled with the spread of the epidemic coronavirus infection.
On the eve of the US currency was supported against the backdrop of US President Donald Trump's statements that he would ask Congress to reduce the payroll tax, and to take other necessary measures in order to offset the negative effects of the coronavirus outbreak in the United States. According to recent data, the number of cases in the US has already exceeded 1,000 people. It should be noted that Trump was able to calm the markets, but only for a short time. Today, market participants once again turned his attention to the prospect of further monetary easing by the Fed, the probability of which has increased significantly against the backdrop of yesterday's Trump calls for an immediate reduction in the Fed rates to near-zero levels, which is characteristic of the central banks of other countries in the Group of Seven.
Thus, the current pressure on the dollar as the time and due to the likely easing in US monetary policy. Many analysts believe that the US regulator can go for additional rate cuts at 0.50% at the meeting of 17-18 March and again on 28-29 April. Such actions will be repeating the Fed's steps the Fed last week, when she went to the extraordinary easing for the first time since 2008, and eventually the target range of the interest rate ranges from 0% to 0.25%. This level was last seen in 2015.
In the course of the day, investors expect the publication of macroeconomic statistics from the US block on the dynamics of consumer prices. Analysts' forecasts suggest a decrease of indicators that could be another argument in favor of new monetary stimulus. Taking this into account, the USDJPY risks remain under pressure.
USDJPY SellStop 104,90 TP 102 10 SL 105,50
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