- US dollar’s rally finds resistance at 104.90/00 area.
- The greenback remains strong with all eyes on the US elections.
- USD/JPY still looking to 104.00 – UOB.
The US dollar remains trading on a bid tone on Monday, appreciating more than 0.3% daily against the Japanese yen, to reach resistance area at 104.90/00 where the bulls have been halted several times over the last week.
US dollar appreciates across the board
The USD/JPY is pushing higher for the third consecutive day on Monday, fuelled by safe-haven demand on concerns about the uncertainty regarding the US elections. As the distance between both candidates tightens in the polls, investors are cutting down their positions, increasing, thus, USD strength. The US Dollar Index, which measures the value of the dollar against a basket of the most traded currencies, has rallied to five-week highs at 94.28.
With only one day before the elections, investors are extremely wary about placing risky bets amid a generalized scepticism regarding the polls. The experience from 2016, when Donald Trump’s victory came utterly unexpected, and fears that contested election, would trigger sharp price movements have triggered a rush for safety that has strengthened the USD.
USD/JPY still looking to 104.00 – UOB
From a wider perspective, the FX Analysis team at UOB warn that a possibility of a bearish reaction below 104.00 should not be discarded yet: “The risk of a break of 104.00 has increased and would continue to increase as long as USD does not move above 105.00’. While USD subsequently dropped to a low of 104.01, it has not been able to make much headway on the downside. From here, a break of 104.00 is not ruled out just yet but in order to rejuvenate the current flagging downward momentum, USD has to move and stay below 104.50 these few days or a break of 105.00 would indicate that USD is not ready to move below 104.00.”
Technical levels to watch
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