USD/JPY dipped slightly as the exit from risk led equities to reverse some recent gains on second-wave COVID-19 fears. It's back within the daily cloud, spanning 107.28-106.45, and eyeing 106.45, the daily cloud base and 50% Fib support of the 101.18-111.72 March range.
USD/JPY bulls have a tough road forward with multiple DMA resistance levels, starting with the 55-DMA at 107.63, 10 and 100-DMA near 108.11 and the 200-DMA capping at 108.45.
Below daily cloud and Fib support by 106.45, USD/JPY finds support near 106, the May 6 and 7 lows.
A break below puts the March 13 low at 104.51 and March 9's COVID-19 low at 101.18 in focus.
The lower global growth and commodity demand outlook is pushing oil and copper lower, hinting at increased expectations of slower near-term growth.
Global rates are also trending lower.
Should the virus linger and earlier accommodation fail to stall further recessionary activity, USD/JPY support is likely to melt away, opening the way for a test of key support by 100.00.
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