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USD/JPY at Key Resistance, RBA Rate Decision May Set Market Mood

USD/JPY at Key Resistance, RBA Rate Decision May Set Market Mood

Thomas Westwater, Analyst

Dow Jones, USD/JPY, RBA – Talking Points

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U.S. equity indexes slipped lower on Monday but the Dow Jones Industrial Average still managed to close out November with the highest monthly gain in over three decades. The 11.84% climb is the best since January 1987. Equity prices were bolstered by positive Covid vaccine news that is fueling hopes for a sharp economic comeback in 2021.

Outside of equities, November has also been a boon for Bitcoin. The cryptocurrency recently overtook its 2017 peak and may continue higher. Meanwhile, anti-fiat gold prices fell nearly 5.5% in November, the worst monthly performance since 2016. Interestingly enough, the US Dollar managed to weaken alongside the precious metal. The DXY index sank a bit over 2% last month, and is now trading under the 92 handle.

US Dollar, Bitcoin, Gold, Dow Jones – Daily Price Chart

Bitcoin, Gold, Dow, USD

Chart created with TradingView

Tuesday’s Asia-Pacific Outlook

Traders will look to capitalize on the recent strength seen across markets as December trading kicks off. USD/JPY remains beholden to its descending channel following Covid-induced volatility in March. However, current price action is seeing some resistance at its 2019 lows. The 20-day moving average also appears to be pressuring price action.

The RBA interest rate decision is in focus on the scheduled event risk front. According to the DailyFX Economic Calendar, no rate change is expected. Economists began hedging expectations for further rate cuts from Australia’s central bank following better-than-expected economic data prints over the last couple of months. Australia’s housing and labor markets appear to be functioning rather well given current conditions.

USD/JPY Daily Price Chart

USDJPY chart

Chart created with TradingView

USD/JPY TRADING RESOURCES

--- Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwater on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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