USD/JPY: Tokyo open welcomes risk-on mood, bulls battle 105.50

USD/JPY takes the bids near intraday high, ignores Friday’s downbeat performance.
Japan’s Nikkei 225, S&P 500 Futures benefit from hopes of US stimulus, virus vaccine.
September month Trade Balance from Japan eased from ¥989.8 B forecast to ¥675 B.
Powell’s speech, risk catalysts remain as the key amid a light calendar at home.

Anil Panchal FXStreet

USD/JPY seesaws around the intraday high of 105.48, up 0.06% on a day, as Tokyo opens for Monday’s trading. The yen pair recently picked up bids as US President Donald Trump rekindled hopes of a bigger stimulus package to combat the coronavirus (COVID-19) as well as giving assurance to have the vaccine soon. Though, no-deal Brexit fears join rising virus numbers from Europe to challenge the bulls.

Trump tries to regain market confidence…

Having initially played hard on the US Democrats’ easy money demands, which likely weigh his chances of winning in the upcoming presidential elections, Trump tries to convince the market that he is not the reason for the delay in the much-awaited stimulus package. In his latest comments, US President said he wants the biggest stimulus deal that House Speaker Nancy Pelosi’s plan. The White House Chief also mentioned that COVID-19 vaccines will be coming out very soon.

Following the news, S&P 500 Futures gain half a percent to 3,480 whereas Japan’s Nikkei 225 also began the day with nearly 1.0% upside. Furthermore, US 10-year Treasury yields offer additional risk-on play with 1.3 basis points (bps) of gains to 0.757% as we write.

On the contrary, fears of hard Brexit have recently gained momentum after the Financial Times (FT) rolled out the news that the UK PM Boris Johnson is pushing British business to stay prepared for a no-deal Brexit. The latest European Union (EU) summit failed to solve the riddle even if UK PM Johnson stepped back from his earlier warning to leave the table after October 15. Furthermore, the virus numbers are rising in Europe and the UK, which in turn suggests another hit to the global economy even as it hasn’t overcome the first wave.

On the data front, Japan’s September month Trade Balance shrank from ¥989.8 B market consensus to ¥675 B. Details suggest -17.2% figures for Imports versus -21.4% forecast while Exports have dropped from -2.4% expectations to -4.9% YoY during the stated month.

Given the lack of data in Asia, except China’s third-quarter (Q3) GDP and September month’s data dump, USD/JPY traders may keep eyes on the risk catalysts for near-term direction. However, major attention will be given to the speech by Fed Chair Jerome Powell, at noon, for a better view of the markets.

Technical analysis

Although 21-day EMA near 105.50 restricts immediate upside of USD/JPY, bears may remain cautious unless witnessing a clear downside break of an ascending trend line from September 23, at 105.05 now.

Additional important levels

Overview
Today last price	105.46
Today Daily Change	0.08
Today Daily Change %	0.08%
Today daily open	105.38

Trends
Daily SMA20	105.46
Daily SMA50	105.77
Daily SMA100	106.39
Daily SMA200	107.38

Levels
Previous Daily High	105.46
Previous Daily Low	105.19
Previous Weekly High	105.8
Previous Weekly Low	105.04
Previous Monthly High	106.55
Previous Monthly Low	104
Daily Fibonacci 38.2%	105.29
Daily Fibonacci 61.8%	105.36
Daily Pivot Point S1	105.23
Daily Pivot Point S2	105.07
Daily Pivot Point S3	104.96
Daily Pivot Point R1	105.5
Daily Pivot Point R2	105.61
Daily Pivot Point R3	105.77

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

GBP/USD loses momentum, flirts with 1.3200

GBP/USD is struggling to maintain its positive bias on Thursday, retreating toward the 1.3200 region in response to the pick in the buying interest around the Greenback. That said, Cable remains under scrutiny as cautious market sentiment keeps investors focused on the US-Iran conflict and political effervescence in the UK.

EUR/USD trims gains, challenges 1.1400

EUR/USD now gives away part of its earlier advance, receding toward the 1.1400 contention zone on Thursday. Meanwhile, the pair’s recovery comes amid extra losses in the US Dollar, at the time when while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold remains bid and close to $4,100

Gold accelerates its recovery and approaches the key $4,000 mark per troy ounce at the end of the week, adding to Thursday’s advance. However, expectations for a hawkish Fed remain steady and keep the yellow metal’s potential upside contained.

Crypto Today: Bitcoin at $60,000, Ethereum at $1,500, and XRP at $1 face a make-or-break test

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are trading in the red on Friday after three consecutive days of losses, testing their respective make-or-break support levels.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.