USD/JPY: The yen imposes its safe-haven status

USD/JPY is giving away part of Tuesday’s sharp advance to the 106.00 area as the resumption of coronavirus fears supports the demand for JPY, Pablo Piovano from FXStreet briefs.

Key quotes

“Renewed concerns around the COVID-19 and its economic impact appear to be sustaining the demand for the safe haven universe once again on Wednesday, lending at the same time extra legs to the yen and collaborating with the pair’s downside.”

“Later on Wednesday, the greenback will be under scrutiny in light of the release of US inflation figures measured by the CPI for the month of February.”

“Extreme oversold conditions in the pair added to the technical rebound on Tuesday and time will tell whether markets are in the presence of a serious rebound or just another ‘dead cat bounce’.”

“On the upside, weekly highs in the 106.00 neighbourhood emerges as the next target of relevance ahead of the critical 200-day SMA in the 108.30 area. If sellers regain control, a breach of recent lows near 101.00 should put the 100.00 support back on the radar.”