USD/JPY's coronavirus exacerbated 110.30-108.73 slide is being stalled by the 100-DMA at 108.73 and a pause in virus-related derisking that comes as markets momentarily look past the near-term impact of the outbreak.
Investors may be eyeing fillips from lower global rates and likely stimulus by China.
This could mean that there will be a cautious consolidation over the next week or two while the spread and impact of the virus are better modeled.
Also there is a lingering need for better returns than DM government yields offer, cushioning the risk-off flows to some extent.
Low yields and hopes for less trade war anxiety this year had, prior to the virus threat, promoted the buy-the-dips mindset in stocks and other risk assets, and selling of the haven yen.
But the coronavirus news is likely to get worse before it gets better, likely keeping the risk-taking mindset subdued near-term.
Weak internals in today's U.S. durable goods report nL1N29X0G4 are a reminder that even with the anticipated phase 1 trade deal with China, businesses remained wary of increased investment, despite tight labor.
Options and an overhang of IMM spec longs suggest the 55-DMA and tenkan at 109.15/52 will cap rebounds.
A sub-100-DMA close would put 108 in play next.
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