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FOREX: USDJPY Prints 152.09, Short-Term Attention on Gap to Friday’s Close

FOREX
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  • While US yields have ticked higher on Tuesday, USDJPY has operated in a relatively contained 45 pip range, recently edging back towards session lows of 152.09. Betting odds for a Trump victory are now more reflective of Friday’s levels, which might suggest the short-term risks could be tilted towards the greenback filling the gap to last week’s closing prints.
  • For USDJPY, closing this gap would require a move to 153.01, and technical conditions suggest an overall bullish trend structure remains intact for the pair. On the topside, a clear breach of 153.40 (retracement level) would set the scene for an extension towards 155.27, a Fibonacci projection.
  • It is also worth highlighting that overnight Reuters cited former BOJ board member Makoto Sakurai as saying the BOJ are likely to wait until January to raise interest rates when there will be more clarity on political and market developments. Given some analysts have touted December for the next move, this could be deemed as a dovish view at the margin.
  • On the other hand, with the election remaining a close call and a potentially subdued session ahead, any early leanings towards a Harris victory could further weigh on USDJPY and there remains plenty of downside before initial firm support at 149.11, the 50-day EMA. The 20-day EMA is at 150.86.
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  • While US yields have ticked higher on Tuesday, USDJPY has operated in a relatively contained 45 pip range, recently edging back towards session lows of 152.09. Betting odds for a Trump victory are now more reflective of Friday’s levels, which might suggest the short-term risks could be tilted towards the greenback filling the gap to last week’s closing prints.
  • For USDJPY, closing this gap would require a move to 153.01, and technical conditions suggest an overall bullish trend structure remains intact for the pair. On the topside, a clear breach of 153.40 (retracement level) would set the scene for an extension towards 155.27, a Fibonacci projection.
  • It is also worth highlighting that overnight Reuters cited former BOJ board member Makoto Sakurai as saying the BOJ are likely to wait until January to raise interest rates when there will be more clarity on political and market developments. Given some analysts have touted December for the next move, this could be deemed as a dovish view at the margin.
  • On the other hand, with the election remaining a close call and a potentially subdued session ahead, any early leanings towards a Harris victory could further weigh on USDJPY and there remains plenty of downside before initial firm support at 149.11, the 50-day EMA. The 20-day EMA is at 150.86.