Created on November 07, 2024

The USD/JPY traded at a high early this morning not seen since the end of July, a collision of nervous sentiment and risk events has led to the bullish climb in the currency pair, today there is the Fed.

• Traders who have the emotional fortitude to participate in the Forex markets and still have a taste for adventure have another day of rather volatile speculation awaiting.
• The USD/JPY traded near a high around 154.720 early this morning, the last time this vicinity in the currency pair had been seen was on the 30th of July. The problem facing, or puzzle challenging, retail traders now is that in July a large bearish trend was in the midst of developing.
• Now the USD/JPY is suffering from a bullish trajectory seen since the end of September, and this is where it get interesting regarding potential perspectives. At the time of this writing the USD/JPY is near 154.200 level.

Yes, the USD/JPY touched the 139.700 level on the 16th of September, this as financial institutions bet on a more hawkish Bank of Japan and a more dovish U.S Federal Reserve. The lows seen in mid-September did reverse higher and by the end of September the price in the USD/JPY was around 141.700. Then global risk adverse trading began in earnest and USD centric strength took over, this morning high underscores the nervousness and risk events in Forex and for the USD/JPY. The currency pair has traded in a rather correlated manner along with other major pairs like the EUR/USD and GBP/USD.

Speculative Intrigue and Confusion for the Near-Term

The U.S President election delivered a demonstrative bit of evidence yesterday. The victory of Donald Trump opens the door to the potential of tough negotiations regarding trade agreements with many nations which will cause Forex prices to potentially become volatile. Fast trading in the USD/JPY will remain part of the landscape today.

Japan however for the moment appears to be in a rather calm spot regarding trade with the U.S, in other words for the time being it appears Japan will not grab the attention of Trump as he deals with other Asian nations like China for instance. Perhaps financial institutions will become more tranquil regarding the USD/JPY.

The U.S Federal Reserve and USD/JPY

On top of the Trump consideration and his impact on policy, the U.S Federal Reserve will announce it FOMC Statement later today. The Fed is in a position to cut its interest rate today by at lease 0.25 basis points. U.S economic data last week via GDP and jobs numbers came in below estimates. While most have been worrying about the U.S election, the Fed will grab the spotlight today and their rhetoric will impact the USD/JPY. However, in the short-term may remain quite choppy as financial institutions readjust their outlooks. Yes, the USD/JPY does look overbought, but do not bet blindly on lower move.

While some traders expected a Trump victory, the scope of his victory opens the door for policy changes which could impact the USD and mid-term outlook.
Many of those impacts still need to be thought out. The USD/JPY does look overbought, but nervous sentiment may continue to keep the currency pair within its higher elements for a bit longer.
Those who want to try and sell may want to use resistance levels technically as a place to launch quick hitting attacks.
However the Fed later today will create a sea of volatility, because the Fed has a new U.S President to deal with too.

USD/JPY Short Term Outlook:

Current Resistance: 154.175

Current Support: 153.990

High Target: 154.340

Low Target: 152.800

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