- Market participants are eagerly awaiting the outcome of the presidential election.
- The US economy added only 12,000 jobs in October.
- The yen remained steady after the BoJ policy meeting.
The USD/JPY forecast shows some relief for the yen as the dollar eases ahead of the US presidential election. The greenback has fallen since last week as political uncertainty in the US sent investors to other safe-haven assets like the yen. At the same time, the yen has remained steady since the BoJ policy meeting.
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Market participants are eagerly awaiting the outcome of the presidential election. 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 that Kamala was at 54 cents while Trump was at 52 cents. A Kamala win would allow the Fed to continue lowering borrowing costs, which is bearish for the greenback.
On the other hand, a Trump win would lead to a rally in USD/JPY as markets adjust to a hawkish outlook for the Fed. Trump’s policies on tariffs and taxes would increase inflation, which would likely force the Fed to pause or hike rates.
Elsewhere, data on Friday revealed that the US economy added only 12,000 jobs in October, well below estimates of 106,000. Furthermore, it was a massive drop from the previous month’s reading, solidifying bets for a November rate cut. Nevertheless, experts noted that most of the change in employment was due to the impact of hurricanes on the economy.
Meanwhile, the yen remained steady after BoJ policymakers held rates unchanged and failed to signal a cautious outlook. The changes in Japan’s political landscape had led some to expect a more cautious BoJ policy outlook.
USD/JPY key events today
The price might consolidate, with no key reports coming out today.
USD/JPY technical forecast: Sentiment shifts, but bears remain hesitant
On the technical side, the USD/JPY price trades below the 30-SMA after finding resistance at the 153.75 level. Bulls stopped near this level, where the RSI showed exhaustion in the uptrend. The RSI made a bearish divergence, later allowing bears to breach the 30-SMA support.
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However, the new move remains weak since bears have failed to detach from the SMA. At the same time, bears face a strong hurdle at the 151.74 support level. A break below this level would allow USD/JPY to start making lower lows. Otherwise, the uptrend will continue.
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