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  • Wall Street trades mixed on Monday.
  • Attention turns to the midterm elections in the U.S.
  • US Dollar Index stays quiet in the negative territory below 96.50.

The USD/JPY extends its sideways movement into the NA session and struggles to determine its next short-term direction as investors stay on the sidelines ahead of Tuesday’s critical midterm elections in the U.S. As of writing, the pair was virtually unchanged on the day at 113.18.

Earlier today, the data released both by the IHS Markit and the ISM revealed that the business activity continued to expand in the service sector at a healthy pace. Commenting on the data, “A rebound from a weather-torn September and strong demand propelled service sector growth in October,”  Chris Williamson, Chief Business Economist at IHS Markit said. The US Dollar Index, which touched a daily high of 96.68, failed to hold on to its gains despite the upbeat data and erased its daily gains.

  • US: Services PMI (final) improves to 54.8 in October from 53.5 in September – Markit.
  • US: ISM Non-Manufacturing PMI comes in at 60.3 in October vs 59.5 expected.

A sharp fall witnessed in the U.S. Treasury bond yields in the NA session put the buck under a bearish pressure and the US Dollar Index was last seen down 0.1% on the day at 94.40. Meanwhile, after starting the day on a mixed note, major equity indexes in the U.S. couldn’t make a decisive move in either direction to reflect the neutral market mood.  

Technical levels to consider

The pair could encounter the first support  at 112.60 (50-DMA) ahead of 111.90 (100-DMA) and 111.35 (Oct. 26 low). On the upside, resistances align at 113.40 (Oct. 31 high), 113.90 (Oct. 8 high) and 114.50 (Oct. 3 high).