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Analyst Richard Perry of Hantec Markets asks if the impressive rebound in the Dollar-Yen that occurred late in yesterday's session can stick, and what this would mean for the outlook.

A remarkable intraday turnaround on Dollar/Yen drove a rebound which could now begin to trigger a recovery.

After initially breaching 104.15 support, the hourly chart shows a sudden +80 pip rebound which has broken a technical bearish sequence of lower highs and lays the foundations for recovery.

How the bulls respond today will be key as to whether this is something more than initial BoJ intervention, or a brief short squeeze.

Resistance at 104.85 on the hourly chart looks to be key now as a close above here would complete a near term base pattern. Two positive daily candles in a row would improve too.

Resistance is then at 105.10/105.30 (old August lows). Building support above 104.00/104.15 is now key too.

There has been a dramatic shift in sentiment early this week as risk appetite has taken a huge step back. Markets are reacting to the perception that Europe is having to deal with significant second wave COVID infections with renewed restrictions.

This comes at a time where Congress continues to drag its feet over a US fiscal support package.

Also we can add into this, a big money laundering scandal hitting the banking sector, just for good measure. This all adds up to a shift into safe haven forex, and equities being sold off sharply. The dollar tends to benefit in times of elevated market fear, and this is no exception.

The rebound in the Dollar Index is now testing the key resistance band 93.50/94.00, something that equates to the support around $1.17 on EUR/USD. With dollar strength and concerns over the demand outlook hit the commodities complex with oil and silver sharply lower.

What was also interesting was a return to strong selling on gold, apparently not a safe haven of choice right now. Back in March when equities were selling hard, gold was also sold amidst portfolio liquidation. This is something to keep an eye on in the coming days if equities continue to decline.

The next few days will also be focused on Fed chair Powell, who testifies before Congress on.