Strong recovery extends on optimism over coronavirus treat
The pair extends recovery after previous day’s advance of 0.8% marked the biggest one-day rally since August.
The dollar rose on fresh optimism about treating coronavirus on reports that Chinese University found a drug treat people infected by virus.
The news further boosted risk appetite in the market, lifting the USDJPY pair to the two-week high.
Tuesday’s rally surged through daily cloud and probes above next pivotal barriers at 109.57/63 (weekly cloud top / Fibo 61.8% of 110.29/108.31).
Daily close above here would generate another strong bullish signal for extension of recovery leg from 108.31 low towards psychological 110 barrier and 2020 high at 110.29 (17 Jan).
Caution on weakening momentum and overbought stochastic on daily chart which may slow bulls for consolidative / corrective action.
Broken 20DMA (109.49) offers solid support, with stronger dips expected to remain above 109.28 (broken 30DMA) to keep bulls intact.
Res: 109.72; 109.82; 110.00; 110.29
Sup: 109.53; 109.49; 109.17; 109.06