USD/JPY struggles to extend the recent rebound beyond 106.00

Following a brief test of the area above 106.00 the figure during early trade, USD/JPY seems to have met a cluster of sellers, giving away those initial gains soon afterward, FXStreet’s Pablo Piovano reports. 

Key quotes

“Always amidst increasing cases of COVID-19 across the globe and renewed social restrictions in many countries, market participants keep gauging the impact of the pandemic on the global economy. However, it seems that the ‘half-glass-full’ view dominates the mood among traders, particularly after the latest news that the debate around an extra stimulus package seems to have been resuscitated.”

“Further upside in USD/JPY is expected to face a key barrier in the mid-106.00, where coincide the 100-day SMA and early September tops. Further up comes in the 107.00 neighbourhood, all ahead of the critical 200-day SMA, today at 107.45.” 

“On the downside, initial contention emerges at the so far monthly lows just below 105.00 the figure. A deeper pullback carries the potential to test the 104.00 zone (September 21).”