USD/JPY: Bulls await a move above 107.20

USD/JPY is trading around 107.05 with a limited bullish potential given the absence of dollar’s demand as global equities trade in the green amid hopes for a COVID-19 vaccine. Valeria Bednarik, Chief Analyst at FXStreet, stresses the pair could accelerate the rise once above 107.20.

Key quotes

“Equities are up, in line with the ongoing sentiment. As long as they remain on the bullish side, the pair will likely continue to advance. In the data front, Japan published the May Tertiary Industry Index, which resulted in -2.1%, improving from -6% in April.” 

“The 4-hour chart shows that sellers are rejecting advances around a bearish 20 SMA, which heads lower below the larger ones. Technical indicators, in the meantime, lack directional strength, standing just below their midlines.” 

“USD/JPY could have better chances of recovering once above 107.20, the immediate resistance.”