USD/JPY is at risk of extending its decline on the last day of the year

On Wednesday, USD/JPY fell to 102.95, nearing this month’s low at 102.86, as the dollar remained under selling pressure while the market’s mood was sour. The pair was last seen trading around 103.10, with its bearish potential intact, FXStreet’s Chief Analyst Valeria Bednarik briefs.

Key quotes

“Beyond a delay in US stimulus discussions, market players are looking at the latest covid-related stats, which show that the virus is once again accelerating its spread and stressing health systems in the northern hemisphere. Restrictive measures are in place with tougher ones in the docket.”

“The 4-hour chart shows that the pair remains below all of its moving averages, which offer sharp bearish slopes. Technical indicators resumed their declines within negative levels after a modest corrective advance. A steeper decline could be expected on a break below the 102.86 December low.”