|Day's Range||0.009 - 0.009|
|52 Week Range||0.0087 - 0.0096|
There are no major reports from the U.S. or Japan on Tuesday so the direction of the USD/JPY is likely to be determined by investor demand for risk.
Economic data is likely to have a relatively muted impact on the majors through the day, with heightened geo-political risk to drive the EUR and the GBP.
The US dollar initially tried to rally during the trading session on Monday to kick off the week, but as we got close to the ¥114.50 level, we rolled over yet again.
The sell-off in the EUR/USD pair continued in the Friday’s session as it reached down to the 1.13 level, an area which is supportive. The Italian debt crisis and the Fed’s hawkish attitude on further rate hike are keeping the market under pressure. The 1.27 level underneath is a strong support point and the market is likely to gain enough strength to continue moving higher.
Brexit and Italy will be in focus through the day, the EU Commission the common denominator, placing GBP and the EUR in the spotlight.
Based on last week’s price action, the direction of the USD/JPY this week is likely to be determined by trader reaction to the main Fibonacci level at 113.288.
There are no major reports from Japan, but the key minor report is Preliminary GDP, due to be released early Wednesday. It is expected to come in at -0.3%, down from the previous quarter’s upwardly revised 0.7%. This news will solidify the Bank of Japan’s dovish tone, helping to sustain the upward bias of the USD/JPY.
The Dollar/Yen rose last week as buyers returned to the stock market, dampening the attraction of the Japanese Yen as a safe-haven asset. The Australian Dollar rose steadily all week, seemingly unaffected by the outcome of the U.S. elections and another hawkish statement from the Fed. The New Zealand Dollar rose last week, supported by solid employment data and a surprise tweak to the Reserve Bank of New Zealand’s monetary policy statement.
The growth wave of the dollar on Thursday supported the Fed. Keeping the policy unchanged, the U.S. Central Bank called the economy “strong” and highlighted the need to maintain its course to gradual rates hiking.
The Euro was choppy all through the Thursday’s session, finding it difficult to break above the 1.15 level, which has turned massively resistive. The pair is likely to move in a back and forth momentum in the next few session, till the noise around the US election settles down. Underneath, the 1.13 level will offer maximum support and will continue to consolidate between the 1.13 and 1.15 level. …Read MoreGBP/USD
The RBA’s Statement of Monetary Policy did the Aussie Dollar no favors early on, with focus now on stats out of the UK and Brexit chatter.
The US dollar has risen slightly against the Japanese yen over the last 24 hours as we continue to grind higher. I think that’s probably going to be the case, but quite frankly this is not the place you want to start putting money to work, because we are so extended.
Another risk-on session in the stock market should continue to underpin the USD/JPY on Thursday, however, gains are likely to be limited until after 1900 GMT when the U.S. Federal Reserve releases its interest rate decision and monetary policy statement.
Major currency pairs trade mostly sideways and the U.S. dollar is muted on Tuesday as the midterm elections get under way across the country.
With the fortnight long descending trend-line continue restricting EURUSD’s upside, the pair is likely returning back to 1.1300 support-mark that’s limiting its declines off-late; though, 1.1350 might offer an immediate rest during the quote’s dip. In case the pair refrains to respect the 1.1300 stop, the 1.1285-80 could rather become an intermediate halt prior to pleasing Bears with 61.8% FE level of 1.1120. Alternatively, pair’s successful clearance of 1.1435-40 resistance-line may fuel it towards 1.1510 and then to the 100-day SMA level of 1.1585. ...
Toyota Motor Corp on Tuesday said it sees room to expand in China as growing sales of its luxury brand Lexus help it buck an emerging trend of slowing demand which has hit profit at some of its global rivals. Japan's biggest automaker also raised its full-year operating profit forecast by 4.3 percent, saying improved marketing pushed up sales in China, Europe and elsewhere, while a weaker yen will have a bigger positive impact. Growing demand for Toyota's Lexus luxury brand has boosted China sales in the past year.
A rangebound trade can only mean two things: trader indecision and impending volatility. Of course, the volatility is likely to be fueled by the results of the election.
The US dollar rallied a bit during the Monday session against the Japanese yen but was a bit stagnant as you would expect. At this point, the market looks like it’s trying to reach towards the ¥114.50 level. At this point, I think short-term pullbacks are probably going to remain buying opportunities, with the ¥112 level being rather supportive.
Global stocks remain vulnerable on Monday morning ahead of US midterm elections and geopolitical concerns. Hawkish largest central banks weigh on equity markets.
The British Pound struggled a bit above the 1.30 level in the Friday’s session after stronger than estimated job numbers were reported. Better than expected job numbers and Fed raising the rates will keep the market under pressure for a longer period of time.
We should see heightened volatility on Tuesday/Wednesday due to the U.S. Mid-Term Elections. Look for the Dollar/Yen to strengthen if the Republican Party maintains leadership. The USD/JPY should weaken if the power shifts to the Democratic Party.