USD/JPY Daily Forecast – Yen Gets A Boost From Safe-Haven Buying

USD/JPY Video 02.10.20.

Yen Gains Ground Against U.S. Dollar After Donald Trump Tests Positive For COVID-19

USD/JPY found itself under pressure after U.S. President Donald Trump announced that he tested positive for COVID-19.

The dollar’s reaction against a broad basket of currencies was muted, and the U.S. Dollar Index is mostly flat near 93.75.

However, the shocking news increased demand for Japanese yen, which is a safe haven currency. The U.S. dollar also enjoys this status, but this time traders decided to buy the yen to protect themselves from uncertainty.

The news about Donald Trump’s health will likely remain the main topic of the upcoming days, but traders will also keep an eye on important economic reports.

Today, Japan reported that Unemployment Rate increased from 2.9% in July to 3.0% in August. The country’s Unemployment Rate continues to rise from the low of 2.2% which was reached at the end of 2019 but remains well below the levels seen in other developed countries.

Meanwhile, Japan’s Consumer Confidence increased from 29.3 in August to 32.7 in September, its highest level since February. The report indicated that consumer sentiment continued to rebound from the lows seen in April 2020 but remained well below the levels seen at the beginning of the year – back in January, Consumer Confidence was at the 39.1 level.

Technical Analysis

USD/JPY is currently trying to settle below the support level at 105.20. The next support level for USD/JPY is located at 104.90, and USD/JPY has almost got to the test of this support level during the current trading session.

In case USD/JPY manages to settle below this support level, it will head towards the next support at 104.70.

On the upside, USD/JPY will likely face some resistance at 105.40, although it remains to be seen whether this resistance level will be a major obstacle on the way up in case U.S. dollar starts to gain ground against Japanese yen.

A move above the resistance at 105.40 will open the way to the test of the major resistance at 105.70. This resistance level has already been tested many times, and USD/JPY will certainly need additional upside catalysts to get above 105.70.

For a look at all of today’s economic events, check out our economic calendar.