The USD/JPY has been showing signs of weak bullish momentum for the better part of Thursday’s trading session. This is perhaps because investors have taken a step back cautiously as they wait to see the impact of the upcoming economic update by Federal Reserve chairman Jerome Powell, as well as U.S jobs data.
Consequently, the USD/JPY has experienced decreased volumes or rather not enough momentum to push the price above various resistance levels, thus the weak bullish attempts. The currency pair’s price only managed to break through the 109.08 resistance level briefly before pulling back and almost hit that level once more before another pullback at around 109.05. Other key support levels including 109.28 remain further out of reach for the price judging by Thursday’s performance so far.
Meanwhile, the price has also experienced significant pullbacks during the trading session. It managed to break through the 108.68 support levels, as well as the 108.52 during the same session before turning bullish again. These are signs that investors might be holding back on major bets to avoid being at a disadvantage when the jobs data and Powell’s statement come out.
Powell’s upcoming report is highly anticipated because it will provide insights on how the Federal Reserve expects the economy to respond to its measures that are aimed at combating the impact of the coronavirus. The lockdowns that have prevailed during the outbreak of the disease have had a massive negative impact on economic performance, thus pushing the economy further towards an economic crisis.
Reports of a positive economic response to Federal Reserve stimuli might aid the dollar’s rally while the reverse would allow the Japanese Yen to gain some ground over the greenback. Meanwhile, the U.S jobs data has been looking grim for the past four weeks and the way things are going, it will likely get worse. This is because the rate of infection is yet to be subdued and so far the U.S has reported alarming numbers.