- The dollar was trading near over 2-month highs against its peers.
- Traders are pricing in an 89% chance of a 25 bps Fed rate cut in November.
- Economists expect the next BoJ rate hike in March next year.
USD/JPI price analysis shows bets on a Trump victory are rising, boosting the dollar against the yen two weeks ahead of the presidential election. Meanwhile, Japan’s general election could also weigh on the yen by changing the Bank of Japan’s policy outlook.
–Are you interested in learning more about Australian forex brokers? Check out our detailed guide-
The dollar extended recent gains to trade near a more than 2-month high against its peers. Bets ahead of the November US presidential election show Trump in the lead, supporting the dollar. Trump’s victory is bullish for the dollar, increasing the likelihood of high interest rates. Still, the race is tight and things could change in the run-up to the election.
At the same time, markets are still digesting the new prospect of a gradual cycle of Fed rate cuts. A few weeks ago, interest rate cut expectations showed a 50 basis point cut in November. However, that quickly changed with incoming data. There is currently an 89% chance of a 25 bps rate cut in November.
The US will release business activity data ahead of the policy meeting to show the state of the manufacturing and services sectors.
Meanwhile, in Japan, the upcoming general election on October 27 could change the majority in parliament and affect Ishiba’s position. Such changes could also change the outlook for monetary policy in Japan. The Bank of Japan paused after implementing its first interest rate hike in March. Furthermore, a recent Reuters poll found that most economists expect the next rate hike to be in March next year.
USD/JPI Key Events Today
There will be no high-impact reports from the US or Japan today. Therefore, the dollar could extend its growth.
USD/JPI technical price analysis: Bulls make new highs
From the technical side, USD/JPY the price climbs to make a new high in the uptrend. It is trading well above the SMA, with the RSI in bullish territory. However, the price remained close to the SMA for some time. Accordingly, the slope of the uptrend has slowed.
If you are interested in guaranteed stop loss forex brokers, check out our detailed guide-
At the same time, while the price is making higher highs, the RSI has made lower highs, indicating waning enthusiasm. If this continues, the trend could turn to the downside. However, if the bulls maintain control, the price will return to the resistance level of 152.02.
Do you want to trade Forex now? Invest in eToro!
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing money.
