- USD/JPY is better bid as Wall Street presses on within its recovery despite imminent risks from the US election results.
- USD/JPY has some work to do yet before it reaches the recent highs, but a 'sell the rumour but the fact' could well be the catalyst following a Democrat takeover of the House.
USD/JPY is currently trading at 113.42 and edging its way higher following a surge in the greenback from 96.15 to a high of 96.37 while US stocks continue to climb with all three benchmarks in the green at the time of writing.
The Yen had been as strong as 113.10 as investors prepared and positioned ahead of the US elections that the move was met with a demand for the dollar again at key support as US stocks kicked off on a positive note. EUR/JPY is also a supportive factor, rallying to fresh highs since the 22nd Oct. "In order to restore upside pressure, rallies will need to regain the 130.20 22nd October high and preferably the 200-day ma at 130.28 (favoured)," analysts at Commerzbank argued.
'Sell the rumour but the fact' - USD/JPY to have a look in at 114.74 recent highs again
The results of US congressional election results will be coming through in the early hours of Wednesday morning once votes are counted. With all 435 seats in the House of Representatives and 35 out of the Senate’s 100 seats up for election, as well as 36 state governors. A divided Congress with the Democrats controlling the House of Representatives and the Republicans the Senate is what is priced in. However, a sell the rumour buy the fact could be the outcome of such a result which would likely help the USD/JPY run higher.
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USD/JPY levels
USD/JPY recently broke above the 21-D SMA and the 113.18 mid-July high and but still has some work to do before it reaches the 114.74 recent highs again. Analysts at Commerzbank explained that above 114.74 would target 118.66, the December 2016 high, adding that nearby support is the 112.31 55 day ma ahead of cloud support at 111.91. "Failure at the cloud support (111.91) would target the 109.77/95 200 day ma and August low."
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