USD/JPY trades at one-month low, heading to break below 106.00

USD/JPY has broken its range to the downside, hitting a fresh one-month low of 106.16. The pair has bounced from the mentioned low and trades around 106.30, maintaining a firm bearish stance in the short-term, en route to break below 106.00, FXStreet’s Chief Analyst Valeria Bednarik reports.

Key quotes

“Risk-aversion leads the way amid mounting tensions between the US and China. This last has ordered the closure of the US consulate in Chengdu, as Chinese Foreign Ministry considers the measures a legitimate and necessary response. Meanwhile, the coronavirus pandemic keeps taking its toll. The US has surpassed 4 million cases and reported over 147K deaths, with 1 million new cases in the last two weeks.”

“The 4-hour chart shows that the 20 SMA has turned sharply lower below the larger ones, which also gain downward strength. Technical indicators, in the meantime, head firmly lower within negative levels, supporting another leg south.”

“Support levels: 106.15 105.80  Resistance levels: 106.60 106.95”