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Last week, USD/JPY dropped to the lowest point since the March COVID-19 scare as the contested US Presidential election sent the dollar reeling. Support at 103.10 and 102.75 is technically weak but with a good chance of holding as the surprise at the contested election fades, FXStreet’s Analyst Joseph Trevisani reports.

Key quotes

“The psychological impact of the election dispute should wane quickly. The US has been through these disputes before and there is little doubt that its institutions and public opinion can stand the strain. Markets will be no different. Political rhetoric, which will be profuse in the coming days and weeks, is not reality.”

“The USD/JPY will find weak support at 103.10, the close on March 9 and at the inner channel border at 102.75 which is backed up by the line at 102.60. A sustained panic drop in the USD/JPY is unlikely but the election dispute will delay a stimulus package and forestall a recovery in the pair until it is clear who will be the next President and which party controls the Senate.”

“The rapid decline in USD/JPY has left all three moving averages above the market with the 21-day at 104.82 backing resistance at 104.80. The 100-day at 105.91 and the 200-day at 107.00 are out of the immediate picture and testimony to the election impact.”