USD/JPY: Bears to gain ground on a break below 103.15

USD/JPY trades in the red around 103.50 as markets are mostly optimistic, with the positive sentiment weighing on the dollar. The pair remains neutral in the near-term, with the risk skewed to the downside, according to FXStreet’s Chief Analyst Valeria Bednarik.

Key quotes

“After a post-Brexit deal was achieved on Christmas Eve, investors welcomed news that immunization against coronavirus has begun in Europe with the Pfizer vaccine. The positive mood was later boosted by headlines indicating that US President Trump finally signed the relief/funding bill without amendments.”

“Japan published the preliminary estimates of November Industrial Production, which fell 3.4% YoY, much better than the -10% expected. When compared to the previous month, Industrial Production remained flat, against a 4% advance expected.”

“Bears will have better chances on a break below 103.15, the immediate support level. The 4-hour chart shows that the USD/JPY pair is developing below all of its moving averages, while technical indicators seesaw around their midlines. Approaches to the 104.00 area will likely attract selling interest.”