The dollar is likely to continue to depreciate as Joe Biden moves forward with his stimulus plan and the Federal Reserve continues to pump more money into the economy. Furthermore, since the Federal Reserve is expected to reaffirm its commitment to a highly accommodative monetary policy later this week it only reinforces analysts’ prediction of a weakening USD. Despite this, thanks to the global uncertainty caused by COVID19 and news of a newer and more resilient strain hitting the market, the USD will likely continue to have some support. On the flip side, the JPY is enjoying fresh demand among increasing global uncertainty.
Taking everything into account, today we sold USD/JPY at 103.71 with SL at 104.20 and TP at 102.95. With the long term trend of the USD against the Japanese Yen likely continuing-especially since we recently tested the resistance area, we are likely to see the market offering losing momentum once again. Should the market see a generally stronger JPY, we might soon see further losses for the USD/JPY with the market noting a quick lower move towards the 103.00 area. Also, any risk-off momentum would help further support this trend.