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. See our updated Privacy Policy here.

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
Subscribe
Please try again
More View more
Real Time News
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZBx7g https://t.co/SYKs5FXzIn
  • USD/JPY IG Client Sentiment: Our data shows traders are now at their least net-long USD/JPY since Sep 30 when USD/JPY traded near 111.35. A contrarian view of crowd sentiment points to USD/JPY strength. https://www.dailyfx.com/sentiment https://t.co/zKjU8inhgV
  • - Euro Area inflation still mostly transitory, some components partly more persistent than previously though. - If elevated inflation lasts much longer, it will likely have effect on expectations $EUR
  • ECB's Rehn says there is still plenty of economic slack in Europe $EUR
  • Coming up at half past: my weekly webinar looking at the charts, the sentiment indicators on the calendar this week and the IG client positioning data. Do join me if you can https://t.co/k8xpSlEM0n
  • Join @MartinSEssex at 5:30 EST/9:30 GMT for a webinar on trading sentiment. Register here: https://t.co/CX9djlHnWK https://t.co/DHjcgvlboC
  • 🇪🇸 Balance of Trade (AUG) Actual: €-3.9B Previous: €-1.60B https://www.dailyfx.com/economic-calendar#2021-10-19
  • 🇵🇱 Employment Growth YoY (SEP) Actual: 0.6% Expected: 0.6% Previous: 0.9% https://www.dailyfx.com/economic-calendar#2021-10-19
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 93.40%, while traders in USD/JPY are at opposite extremes with 76.25%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/U1taXgNx2T
  • Heads Up:🇪🇸 Balance of Trade (AUG) due at 08:00 GMT (15min) Previous: €-1.60B https://www.dailyfx.com/economic-calendar#2021-10-19
USD/JPY Price Outlook: Dollar-Yen Undermined by Stimulus Hopes

USD/JPY Price Outlook: Dollar-Yen Undermined by Stimulus Hopes

Rich Dvorak, Analyst

USD/JPY PRICE OUTLOOK: US DOLLAR COULD FALL VS JAPANESE YEN AS FISCAL STIMULUS DEAL STEERS GREENBACK LOWER

Advertisement

The US Dollar has faced heavy selling pressure throughout Tuesday’s trading session. Broad-based US Dollar weakness has weighed negatively on the DXY Index and just pushed the benchmark below a major support zone. USD downside largely follows rekindled fiscal stimulus optimism after Democratic House Speaker Nancy Pelosi conveyed an upbeat tone earlier today on the possibility that a coronavirus aid package can be reached before the November 2020 election.

Pelosi, who will speak with Treasury Secretary Steven Mnuchin again this afternoon in an attempt to finalize legislative text, stated that the Trump administration has ‘come a long way toward reaching an agreement.’ Reinvigorated fiscal stimulus hopes thanks to encouraging remarks from Pelosi exacerbated US Dollar downside and helped steer spot USD/JPY price action to session lows.

USD/JPY PRICE CHART: DAILY TIME FRAME (01 JUL TO 20 OCT 2020)

USD JPY Price Chart USDJPY Dollar Yen Technical Forecast

The intraday reversal by USD/JPY also happens to correspond with another rejection of its 50-day simple moving average. This highlights growing potential for further Dollar-Yen weakness, which could motivate USD/JPY bears to eye another retest of the 105.00-handle and month-to-date lows. Breaching this technical support level could see USD/JPY prices extend even lower toward the 104.00-mark. Notable hurdles still stand in the way of politicians being able to break the ongoing impasse over passing a comprehensive coronavirus aid package prior to the upcoming election, however.

A last-minute breakdown in fiscal stimulus negotiations due to differences on aid to state and local governments, or failure to garner enough support in the Republican-controlled Senate, pose upside risks to USD/JPY price action. That said, eclipsing the bearish trendline extended through the series of lower highs since early July might open up the door for USD/JPY bulls to target the 106.00-price level before setting their sights back on August highs.

-- Written by Rich Dvorak, Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

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

DISCLOSURES