News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Bearish
More View more
Real Time News
  • Indeed... because my report was posted many hours ago https://t.co/SKzJUGRG9h
  • And a great guest you were too. Thank you! https://t.co/noZQNreeEF
  • USD/CAD trades to a fresh monthly high (1.3390) as the US Dollar appreciates on the back of waning risk appetite. Get your market update from @DavidJSong here:https://t.co/1su6hczNz3 https://t.co/9PqqeS7Seb
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.45% Silver: 0.15% Gold: -0.38% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/ZbuJCtwSLe
  • Crude Oil Forecast: WTI Crude Oil Sinks to Fresh Four-Month-Lows https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2020/10/29/Crude-Oil-Price-Forecast-WTI-Crude-Oil-Sinks-to-Fresh-Four-Month-Lows.html https://t.co/VZkDC7TZ3t
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.31%, while traders in NZD/USD are at opposite extremes with 68.35%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/InT3aJBPqT
  • Indices Update: As of 18:00, these are your best and worst performers based on the London trading schedule: US 500: 1.46% Wall Street: 0.86% FTSE 100: 0.67% France 40: 0.62% Germany 30: 0.60% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/gQnHmoLx2Q
  • Commodities Update: NYM WTI Crude 36.22 (-3.13%), ICE Brent Crude 37.79 (-3.35%), NYM NYH Gasoline 104.69 (-3.19%). [delayed]
  • #Gold Price Forecast: $XAUUSD Pre-Election Breakdown to Monthly Lows - https://t.co/qfEko0woN7 https://t.co/vvWdrxOQMP
  • ECB sources - policymakers favoured more bond purchases, others TLTRO and others a mix of both $EUR
USD/JPY Analysis: USDJPY Surges, Postponement of US Stimulus Talks

USD/JPY Analysis: USDJPY Surges, Postponement of US Stimulus Talks

2020-10-07 11:47:00
Richard Snow, Markets Writer
Share:

USD/JPY Analysis:

  • President Trump returns to the White House and advises negotiators to walk away from stimulus talks until after the US presidential election
  • USD/JPY surges but faces near term challenges for a continued bullish move
  • IG Client Sentiment reveals a mixed trading environment even though sentiment tipped slightly to the short side for the first time since early June
Advertisement

US Stimulus Talks Postponed till After the Election

This week, President Trump made his return to the White House and wasted no time to once again appear on the top story for many news outlets as he advised his negotiators to walk away from talks regarding further stimulus until after the election.

This latest development suggests that monetary and fiscal policy may not be fully aligned as news of Trumps decision came just hours after Fed Chair, Jerome Powell warned that the economy could see “tragic” outcomes without robust government support.

Revelations like this may hold more sway on the markets as the US prepares to hold elections next month – learn how this presidential election may prove anything but typical for the US dollar.

Trading Forex News: The Strategy
Trading Forex News: The Strategy
Recommended by Richard Snow
Learn how to prepare for market moving news
Get My Guide

Event Risk on the Horizon

Scheduled event risk remains relatively quiet this week apart from a number of central bankers speeches throughout the week. Tomorrow, Bank of Japan Governor, Kuroda is scheduled to speak, the US vice presidential debate takes place and the initial jobless claims numbers are released.

Central Banks have the ability to impact major financial markets. Find out why in our FX Trader’s Guide to Central Banks.

DailyFX economic calendar

For all market-moving data releases and events see the DailyFX Economic Calendar

USD/JPY Surges: Key Technical Levels

The markets seem to have responded more favorably to the return of president trump than to the recent news of the postponement of stimulus talks. The latest surge has propelled the pair above the July/August descending trendline mentioned in our previous report where a break and close above the trendline may present the start of a continued move higher.

However, a near term area of confluence around the 106.20 level (circled in yellow) poses an immediate challenge to a bullish continuation as the 100 exponential moving average (EMA), the red line, currently rests on the 106.20 level. A close above 106.20 and the 100 EMA may see price advance higher to the upper end of the medium term range (shown in blue), before 107.50 and 107.80 become the next levels of resistance.

Should bullish momentum fade and price remain below the descending trendline, this may indicate a reluctance to breakout of the longer term down trend - identified by multiple lower highs observed since June – and may open the door to lower prices. Initial support comes in at 105.35 before the psychological round number of 105.00 becomes the next level of support. Further declines would see 104.80 as the next level of support before retesting the September low.

USD/JPY Daily Chart with Key Technical Levels

USD/JPY Daily Chart showing technical levels

Chart prepared by Richard Snow, IG

USD/JPY Client Sentiment Data Shows Uncertain Trading Environment

How to Use IG Client Sentiment in Your Trading
How to Use IG Client Sentiment in Your Trading
Recommended by Richard Snow
Discover what client sentiment can reveal about FX markets
Get My Guide
USD/JPY Client Sentiment

USD/JPY Client Sentiment Data:

  • USD/JPY: Retail trader data shows 50.76% of traders are net-long with the ratio of traders long to short at 1.03 to 1.
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long would usually suggest USD/JPY prices may fall.

Interpretation of the Data:

  • The number of traders net-long is 6.09% higher than yesterday and 1.04% higher from last week, while the number of traders net-short is 5.80% lower than yesterday and 36.07% higher from last week.
  • The combination of current sentiment (not showing a substantial imbalance in either direction) and recent changes provides us with a mixed USD/JPY trading bias.

--- Written by Richard Snow for DailyFX.com

Contact and follow Richard on Twitter: @RichardSnowFX

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

DISCLOSURES