USD/JPY pullback stalls near key technical support again for now

The dollar opened with a gap lower today before keeping lower since Asia trading. The needle hasn’t really moved since we got to European morning trade, with market players waiting on potentially more developments in the polls later in US. In the case of USD/JPY, the pair is sticking closer to 152.00 after having earlier touched a low of 151.60 on the day.

Looking at the charts, the low comes close to testing the 200-day moving average (blue line). The level is seen at 151.55 currently and was what helped to arrest a slight pullback towards the end of October.

Towards the upside though, buyers are finding it tougher to crack the 61.8 Fib retracement level at 153.40. So, that creates a sort of box for price action as we look towards the US election tomorrow.

As much as I want to emphasise on the technicals, just be wary that headlines are going to be the main driver of trading sentiment in the pair in the next few days. The US election results will offer plenty of volatility and that won’t just be for the dollar but for bonds as well. So, that creates a double-dipping impact on USD/JPY.

The technicals will act as a guide in identifying biases and key potential target regions but the headlines is going to be what drives the moves. So, do plan and consider accordingly if you’re looking to try and find for opportunities in the pair over the next few sessions.

With 10-year yields down 7.5 bps to 4.305% now, USD/JPY is also pushed back by 0.6% on the day to 152.00 currently. The dollar is down across the board with levels holding thereabouts as seen here.

This article was written by Justin Low at www.forexlive.com.