USD/JPY Price Analysis: Dollar’s recovery attempt stalls at 104.95 former support

• USD/JPY recovery from 10435  finds resistance at 104.95 previous support
• The dollar remains trapped within a downtrend channel

The US dollar’s reversal from weekly highs at 105.75 witnessed on Wednesday has been contained at 104.30 area on Thursday and the greenback attempted to pick up with amid a broad-based dollar strength although the pair was unable to regain previous support level turned resistance, right below 105.00

Dollar ticks up on risk aversion

The US dollar trimmed earlier losses on Thursday amid a generalized rush for safety after US President Trump crushed hopes of a US stimulus agreement before November’s election. Trump accused the Democrats on Twitter of not willing to reach an acceptable agreement which dampened investors’ optimism and offered some respite to a tumbling greenback.

Furthermore, the positive US Weekly Jobless Claims, which posted a larger than expected decline last week: 787K against market expectations of 860K offered further support for the US dollar.

USD/JPY capped below previous support at 104.90

USD/JPY’s upside attempt, however, has been tame, and the pair remains trading within a clear downtrend channel. Greenback's rebound from 104.35 low has found resistance right below 104.95/05 area, where the October 2 and 14 lows lie. If the pair manages to break that level, next resistance lies at 105.50/60 (October 21 high / 50-day SMA) before 106.10 (October 7 high).

On the contrary, a bearish reversal below October 21 low at 104.35 might find support at 104.00 (September 21 low) before heading to March 12 low at 103.10.

USD/JPY daily chart