USD/JPY eyes the 2020 March low at 101.17

The American dollar is in sell-off mode as market players return from a long holiday, and USD/JPY trades around 102.90 after hitting 102.70, its lowest since March 2020. The pair is at risk of extending its decline, with investors eyeing 101.17, according to FXStreet's Chief Analyst Valeria Bednarik.

Key quotes

“Immunization has slowly kick-started around the world, although the number of new cases and deaths is rapidly rising. Restrictive measures are already in place, and additional ones are being studied. In Japan, a curfew has been announced in Tokyo starting 8 pm, as bars and restaurants have been asked to close at that time, while people have been asked to stay in unless urgent needs.”

“From a technical point of view, the USD/JPY pair is bearish. The 4-hour chart shows that the 20 SMA keeps accelerating south above the current level and below the larger ones. Technical indicators, in the meantime, remain near daily lows, paring their declines but far from suggesting an upcoming recovery.” 

“Further declines are expected on a break below the 102.70 daily low, with investors eyeing a test of the March 2020 low at 101.17.”