- Trade optimism weighed on the JPY’s safe-haven status and provided a modest lift.
- The ongoing uptick US bond yields underpinned the USD and remained supportive.
- Bulls lacked any strong conviction ahead of this week’s FOMC/BoJ policy decisions.
The USD/JPY pair edged higher on the first day of a new trading week and climbed to 1-1/2 week tops, albeit lacked any strong follow-through traction.
The incoming positive trade-related headlines remained supportive of a generally risk-on mood and continued weighing on the Japanese Yen's perceived safe-haven status, which turned out to be one of the key factors lending some support to the major.
Investors hold back ahead of FOMC/BoJ decision
In the latest development, the US Trade Representative's office on Friday said that the US and China have made progress in trade talks. The US officials said that they have come close to finalizing parts of a “phase one” trade deal hope to sign a deal in mid-November.
Apart from growing trade optimism, some follow-through pickup in the US Treasury bond yields underpinned the US Dollar demand and further collaborated to a mildly positive tone surrounding the major, though bulls struggled to capitalize on the uptick.
The market focus now shifts to this week's key event risks – the FOMC meeting on October 29-30 and the Bank of Japan policy update on October 31. The Fed is expected to cut interest rates for a third time this year but has already been priced into the market.
Hence, investors will closely scrutinize the accompanying policy statement to find if this would be the end of the easing cycle or the central bank is ready to cut more. On the other hand, the BoJ is anticipated to keep policy on hold but the decision is likely to remain divided amid global economic growth concerns.
In the meantime, the broader market risk sentiment and the USD price dynamics might act as key determinants of the pair's momentum amid absent relevant market-moving economic releases on Monday.
Technical levels to watch
|Today last price||108.73|
|Today Daily Change||0.07|
|Today Daily Change %||0.06|
|Today daily open||108.66|
|Previous Daily High||108.78|
|Previous Daily Low||108.51|
|Previous Weekly High||108.78|
|Previous Weekly Low||108.25|
|Previous Monthly High||108.48|
|Previous Monthly Low||105.74|
|Daily Fibonacci 38.2%||108.67|
|Daily Fibonacci 61.8%||108.61|
|Daily Pivot Point S1||108.52|
|Daily Pivot Point S2||108.38|
|Daily Pivot Point S3||108.25|
|Daily Pivot Point R1||108.79|
|Daily Pivot Point R2||108.92|
|Daily Pivot Point R3||109.06|
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