USD/JPY price moves higher on better risk sentiment
- Risk improves as U.S. and China reaffirmed their commitment to the Phase 1 trade deal
- The U.S considering fast-tracking the coronavirus vaccine produced by AstraZeneca and Oxford
- USD/JPY price has broken above the intraday resistance at $106.20 as the buyers eye $107.00 resistance next
USD/JPY price gained on Tuesday as global equities raced higher on positive news related to the coronavirus vaccine developments and indications about progress in the trade deal between the U.S. and China.
Fundamental analysis: Equities gain on improving risk sentiment
Global equities moved on reports that high ranking officials representing the U.S. and China held a phone call and reaffirmed their commitment to the Phase 1 trade deal, unloading a great burden from the markets after several months of heightened tensions between the two countries.
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The risk sentiment received another boost was also boosted by reports that the Trump administration was thinking about fast-tracking the coronavirus vaccine that was produced by the British drugmaker AstraZeneca and Oxford University to make it ready ahead of forthcoming presidential elections in November.
AstraZeneca’s representative said there were no discussions between their company and U.S. about a potential emergency use authorization for their vaccine. Oxford Vaccine Group’s executive said the vaccine could be presented to the regulators this year.
Michael Hewson, the chief market analyst at CMC Markets UK, said the recovery in American stocks may be ‘unbalanced’, given that it’s boosted by a rather small number of big technology corporations.
The dollar index plunged 0.2% to 93.061, while the euro climbed 0.4% to $1.18325.
Technical analysis: USD/JPY breaks above intraday resistance
USD/JPY price has broken above the intraday resistance at $106.20 to open the door for a potential move towards the $107.00 resistance line. The level of $106.20 used to act as support as it connects two swing lows from May and June, while the $107.00 mark is where the 100-DMA and the horizontal resistance line are located.
The buyers will now hope to sustain this positive momentum although much will depend on the Fed’s meeting that is supposed to end today. The Fed is seen holding interest rates at zero for the next few years.
Positive news about coronavirus vaccine developments and reaffirmation of the commitment in the Phase 1 trade deal between the U.S. and China sent global equities higher today, helping USD/JPY to modestly rise as well.