Fundamental Overview
The US Dollar is higher across the board today as Trump got elected President of the US. The Republicans won the Senate, and they just need the House now to get a red sweep.
That is the most bullish scenario for the greenback as it would make the tax cuts easier to pass which should lead to higher growth and less rate cuts expectations. As of now, the probabilities are in favour of the Republicans.
Given the above and the strong US data we keep on getting, the Fed might start to change its stance and we could see a much earlier than expected pause in 2025.
USDJPY Technical Analysis – Daily Timeframe
On the daily chart, we can see that USDJPY bounces from the key support around the 152.00 handle. The buyers will now start targeting the 160.00 handle, while the sellers will need to see the price falling below the 152.00 handle to invalidate the bullish setup and position for new lows.
USDJPY Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is consolidating around the highs. This is where we can expect the sellers to step in to position for a drop back into the 152.00 handle, while the buyers will keep on piling in around these levels to extend the rally into new highs.
USDJPY Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price is trading above its average daily range for today. Generally, we can see some consolidation or a bit of a pullback in such instances, but since the election is a big catalyst, we could even see the market extend much above it.
Upcoming Catalysts
Tomorrow we have the Japanese wage growth data, the US Jobless Claims and the FOMC Policy Decision. On Friday, we conclude the week with the University of Michigan Consumer Sentiment report.
