- Market participants are eagerly awaiting the outcome of the presidential elections.
- The US economy added only 12,000 jobs in October.
- The yen remained steady after the BoJ policy meeting.
The USD/JPI forecast shows some relief for the yen as the dollar eases ahead of the US presidential election. The dollar has fallen since last week as political uncertainty in the US sent investors into other safe-haven assets such as the yen. At the same time, the yen has remained stable since the BoJ policy meeting.
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Market participants are eagerly awaiting the outcome of the presidential elections. Bets have fluctuated in recent weeks, with no clear winner. Initially, Trump was in the lead, which supported the dollar. However, by Monday morning, PredictIT showed Kamala at 54 cents, while Trump was at 52 cents. A victory in Kamala would allow the Fed to continue lowering borrowing costs, which is for the dollar.
On the other hand, a Trump victory would see USD/JPI rise as markets adjust to a hawkish outlook for the Fed. Trump’s tariffs and tax policies would increase inflation, likely forcing the Fed to pause or raise rates.
Elsewhere, data on Friday revealed that the US economy added just 12,000 jobs in October, well below the estimate of 106,000. Moreover, it was a huge drop from the previous month’s reading, solidifying bets for a November rate cut. However, experts noted that most of the change in employment was due to the hurricane’s impact on the economy.
Meanwhile, the yen held steady after BoJ policymakers kept rates unchanged and failed to signal a cautious outlook. Changes in Japan’s political landscape have led some to expect a more cautious view of BoJ policy.
USD/JPI Key Events Today
The price could consolidate, with no key reports due today.
USD/JPI Technical Forecast: Sentiment is changing, but bears remain hesitant
On the technical side, the USD/JPI price is trading below the 30-SMA after finding resistance at the 153.75 level. The bulls stopped near this level, where the RSI showed exhaustion in the uptrend. The RSI made a bearish divergence, later allowing the bears to break through the 30-SMA support.
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However, the new move remains weak as the bears failed to break away from the SMA. At the same time, the bears face a strong obstacle at the support level of 151.74. A break below this level would allow USD/JPY to begin making lower lows. Otherwise, the upward trend will continue.
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