USD/JPY trades deep in negative territory below 105
- DJIA is now in a bear market, down 20% from all-time high.
- US Dollar Index looks to close flat near 96.50.
- US' coronavirus response bill is expected to be released on Wednesday.
Despite the fact that the US Dollar Index was able to erase its daily losses during the American trading hours, the USD/JPY failed to stage a meaningful recovery as risk-aversion remains the main market theme on Wednesday. As of writing, the pair was trading at 104.75, erasing 0.85% on a daily basis.
Risk-off flows continue to dominate markets
The surging number of confirmed coronavirus infections globally and heightened fears over a protracted global recession continue to weigh on the sentiment. Although major economies have started to announce their measures to battle this crisis, markets remain in panic mode as experts struggle to see how severe the damage on the global economy will be.
Reflecting the sour market sentiment, major equity indexes register heavy losses on Wednesday with the Dow Jones Industrial Average falling 20% below the all-time high to mark the beginning of a bear market.
Meanwhile, the US Dollar Index is moving sideways near 96.50 while the US is still working on a coronavirus response package. According to the latest headlines, the bill is expected to be presented later in the day and put to a vote on Thursday. Moreover, Reuters reported that US President Trump was considering declaring the coronavirus outbreak a national disaster to free up the funds needed.
Technical levels to watch for