FxWirePro: USD/JPY trades rangebound in early Asian trade, minor upside likely as vaccine expectations gain momentum

USD/JPY chart - Trading View 

USD/JPY was trading largely rangebound on the day with session high at 103.86 and low at 103.71.

Expectations over the rapid rollout of vaccines supports upbeat market mood, S&P 500 Futures extend recovery from one week low.

As the risk barometer picks up, S&P 500 Futures probe intraday high of 3,565.88, up 0.31% on the day in the Asian session on Monday. 

Further, easing of coronavirus-led activity restrictions in the UK, France and Australia are additional positives for the risks.

Fed's balance sheet hits new record high as the central bank's unprecedented monetary easing continues alongside a resurgence of coronavirus cases.

According to data from St. Louis Federal Reserve, Fed balance sheet has expanded to a new record high of $7.24 trillion, surpassing the previous high of $7.17 trillion reached in October.

The nearly 80% balance sheet growth this year has boosted inflation expectations, putting a strong bid under scarce assets such as gold. 

Focus now on the Markit's preliminary readings of November’s activity numbers for further direction. Risk will also remain the main driver for price action.

Technical analysis shows no respite from the bear grip. Intraday bias is neutral, but major trend remains strongly bearish.

Next major support lies at 103.25 (Rising trendline). Break below will see dip till 101.75 ahead of 101.18 (2020 lows). 

Upside remains capped at 5-DMA at 103.86. Break above could see minor gains. Bearish invalidation only above daily cloud.