On the last trading day of the week, the USDJPY pair stays under pressure below the key psychological mark 110.00 after previous daily closing in the green zone near 109.95.

On Friday, risk-off returned to markets in the Asian trading amid concerns over the unstoppable Chinese coronavirus. The death toll rose to 636 cases (73 new cases confirmed today) while the number of infected people exceeded 31,000. And though the People’s Bank of China (PBOC) tried to calm markets down by stressing that the impact of coronavirus on the economy was a temporary phenomenon and adding that China would manage to curb the epidemic, the markets don’t look convinced enough. The safe-haven yen capitalized on investors’ fears and the major continued to edge lower.

The situation for risk assets was exacerbatedby the news about the Diamond Princess, a Japanese cruise liner which had been kept in quarantine for two weeks already. Today, a Japanese state-owned broadcaster NHK confirmed that the number of people positively tested for the new coronavirus on the liner climbed to 61 though earlier only 20 cases were reported. The ship was put to quarantine after one of the passengers, an 80-year-old man who disembarked in Hong Kong, was diagnosed with the virus.

In early European session, Japanese Chief Cabinet Secretary Yoshihide Suga promised to introduce emergency measures in order to fight the coronavirus outbreak next week. His comments soothed markets a little and improved the sentiment. However, it didn’t last long. Subsequently, the major rose to the 109.95 mark and tested 110.00 (psychological level) but failed here and plunged to the 109.80 region in the last hour.

Today, traders focus on the US Nonfarm Payrolls that will be released in the NA session. The headline reading is expected to increase to 160K vs. 145K previously while the Average Hourly Earnings (YoY) may arrive at 3.0% vs. 2.9% last. Solid figures may boost USDJPY and help it to recover. In case of weak data the major may continue its decline.

From the technical point of view, the USDJPY pair changes gains with losses and seesaws in the daily trading range of 109.78-110.03. The support lies at 109.70, 109.30 and 109.00 while the resistance is seen at 110.05, 110.25 and 111.00. Ahead of the US employment report, investors prefer to refrain from placing any aggressive bets and wait for the results. That prevents the major from setting a sustainable trend. Overall, coronavirus and its impact on the global economy still remain the main topic.


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