FxWirePro: USD/JPY retraces brief dip below 106 handle, dollar bid on hopes of an economic restart

USD/JPY chart - Trading View 

USD/JPY has erased early losses and was trading at 106.22 at around 02:15 GMT.

The major has edged higher from session lows at 105.99 as US dollar resumed bids amid hopes of an economic restart.

US President Trump recently pushed harder on post-crisis economic restoration while winding down the coronavirus (COVID-19) task force team.

Also market’s risk-off tone amid souring U.S.-China trade relations is likely to weigh on the pair.

Technical studies support weakness in the pair with major and minor trend being strongly bearish.

Price action is extending weakness below daily cloud and 'Death Cross' adds to the bearish bias.

5-DMA caps upside at 106.48. Volatility is rising and momentum with the bears. Scope for dip till 61.8% Fib at 105.20.

On the flipside, 21-EMA is major resistance at 107.18. Decisive break above could negate near-term bearish bias.

On the economic calendar, U.S Jobless claims (12:30 GMT) and Japan overall Household Spending (23:30 GMT) will be watched for impetus.

Major Support Levels: 106, 105.20 (61.8% Fib), 103.97 (200M SMA)

Major Resistance Levels: 106.48 (5-DMA), 107.18 (21-EMA), 107.85 (55-EMA)

Summary: Upside lacks traction. Near-term trend reversal only above 21-EMA. Scope for further weakness.