22 Oct 2024

CURRENT;-150.943

TARGET;-154

STOPLOSS;-149

OVERVIEW

ü  The Japanese Yen (JPY) reached a new low against the US Dollar (USD) on Tuesday, marking its lowest point since late July. However, there has been a lack of significant selling pressure due to concerns about potential government intervention. Additionally, a slight decline in the US Dollar has not enabled the USD/JPY pair to maintain its modest intraday gains above the151.00 level. Nevertheless, substantial appreciation of the JPY appears unlikely given the ongoing uncertainty surrounding the Bank of Japan's (BoJ) interest rate policies and the upcoming general election in Japan on October 27.

ü Bets on a more cautious approach to policy easing by the Federal Reserve, coupled with worries about possible increases in deficit spending following the US Presidential election on November 5, continue to bolster high US Treasury bond yields. This situation may hinder any recovery attempts for the lower-yielding JPY and restrict the corrective decline of the USD, indicating that the most likely direction for the USD/JPY pair is upward. Traders are now anticipating insights from Philadelphia Fed President Patrick Harker's upcoming speech for further guidance.

 Technical outlook

ü A daily close beneath 150.00 would signal a potential pullback, bringing at 149.27 into focus. If this level is breached, significant support levels would come into play, including 149.00, followed by at 147.16, and ultimately the 50-DMA at 145.55.

ü The USDJPY pair experienced a robust upward movement yesterday, reaching the anticipated target level of 151.09. This increase was bolstered by support from the EMA50, enhancing the likelihood of breaking through this level, which could pave the way for further gains in the near future. The subsequent target levels are projected at 152.05 and then 153.00 154.00

Consequently, the bullish trend remains intact and active. However, if the price fails to break above 151.09, it may result in a bearish correction, potentially leading the price to revisit the 148.53 area in the short term.