The wandering slide and financial value deterioration experienced by the USD/JPY pair calls for concerns. The aftermath of the COVID-19 pandemic has raised nerves, and the volatility of the pair persists despite recording marked improvement in recent weeks. But, taking an analytical look at each of the pair, JPY less risk involvement has warranted its bragging rights over the popular USD. Despite receiving several backings, USD risks are high, and losses are expected to be wide. Analysis of the current market trends of the European session has proved that the pair is dwindling, and dropping, and are on the lookout for a possible breakthrough.
Market Analysis
The USD/JPY pair has in recent times fallen below the 110.00 psychological marks amid cautious market mood, and risk the possibility of losing key investors, and traders. Nevertheless, after a near one-month low trading output, the pair surge during the first trading session of the market shows its will and real intent for a comeback. USD value was above par average after the pandemic and this boosted the pair market advantage. However, the USD backup master, Hawkish Fed, might strengthen their monetary policy to the benefit of the pair. This is will give investors an edge, and assure them of safety even in cases of inflation and other negative market events.
More so, Fed Chair Jerome Powell’s semi-annual congressional testimony will be held on the coming Wednesday and Thursday. Critical issues about States’ bank policy will be discussed, and the outlook of events will be analysed. This will be done by the group to strengthen USD short-term value.
Nonetheless, the possible breakout of the rumoured infectious Delta (2nd variant) type of COVID-19 has already caused US equity value to fall. Precautions and safety procedures are the most likely to be used by market experts owing to previous harsh experience with the virus first variant of the coronavirus. Thanks to the strong, safe, and steady JPY, the pair jitters concerning a major blow is subsided.
Future Possibilities
Coupled with sentiments arising from sustaining its psychological benchmark score, the USD/JPY pair has lots of reasons to be concern about the rumoured upgraded pandemic breakout. This will usher in fear, and anxiety, leaving the market open. Investors would be extra careful on trading with the USD/JPY pair, despite higher levels of short-term opportunities. Also, price dynamics and risk sentiments will play a major role in key upcoming events as the market fluidity of the pair remains volatile.
