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MENAFN- Daily Forex)
Amid a neutral stance with a bullish bias, the USD/JPY currency pair may be influenced by signals from the US elections and the FOMC decision this week. The US elections are scheduled for November 5, and many say the results could come soon. A victory for former President trump could mean a bullish mood for the stock market, which could also impact the prospects of Fed easing and thus lift the US dollar. Meanwhile, USD/JPY is holding steady around 152.50 at the time of writing.
Later in the week, the
federal Reserve is still widely expected to cut US interest rates by 0.25%, although some say it could hint at a pause in December. It is worth noting that the two non-farm payrolls report surprised markets with their rise, while the latest inflation figures reflected higher-than-expected price pressures, easing pressure on the central bank to stimulate the economy.
On the other hand, the Bank of Japan's decision appeared less dovish than usual last week, with Governor Ueda hinting that he may tighten monetary policy soon.
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According to stock trading platforms, US stock futures settled on Tuesday as investors prepared for the disputed US presidential election. Recent polls indicate a tight race between Vice President Kamala Harris and former President Donald Trump, with markets also focusing on which party will control Congress, as a potential victory could lead to major shifts in spending and tax policies. Investors are also awaiting the Federal Reserve's policy decision later this week, where it is widely expected to cut interest rates by 25 basis points in a more cautious manner.
According to trading, the Dow Jones fell 0.61% on Monday, the S&P 500 fell 0.28%, and the Nasdaq Composite dropped 0.33%. Notable declines came from major tech stocks, including Tesla (-2.5%), Amazon (-1.1%), and Meta Platforms (-1.1%). In after-hours trading, Palantir Technologies rose more than 13% after strong quarterly results and upbeat earnings forecasts. Meanwhile, NXP Semiconductor shares fell about 6% after issuing a weak forecast, pointing to broader macroeconomic concerns/JPY Technical Analysis and Expectations Today:
EURUSD Chart by TradingView
The USD/JPY recently broke through the 147.50-150.00 resistance levels and rallied to a high of 153.86 before retreating. Furthermore, using the Fibonacci tool, levels can be identified where more buyers might join the uptrend. The 100-day simple moving average is above the 200-day simple moving average, confirming that the path of least resistance is upward or that support is more likely to hold rather than break.
The 38.2% Fibonacci level is located at 149.18, followed by the 50% level closer to the area of interest at 147.75, in addition to the dynamic support of the 200-day simple moving average. The dividing line for a bullish reversal could be the 61.8% level at 146.30. The Stochastic oscillator is trending lower to show bearish pressure, but the oscillator is also approaching oversold territory, signalling exhaustion. Technically, a shift to the upside means buyers are ready to take over and potentially push the USD/JPY to a higher high. The Relative Strength Index is also moving lower, so the price may follow suit as sellers are in a better position.
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