- USD/JPY trading sideways between 10420 and 105.20.
- The dollar pulls back as Biden takes the lead in the vote count.
The US dollar has been moving without clear direction between 104.20 and 105.20 on Wednesday, before consolidating around 104.50 as the investors await the developments of the US presidential elections.
US dollar loses ground as Biden takes the lead
The USD/JPY surged to two-week highs at 105.35 on early trading as the first results of the elections negated the Democrat landslide anticipated by the opinion poll. The close race between the two candidates prompted investors to close risky bets and triggered a sharp USD rally.
Donald Trump claimed victory immediately after the voting and sent the US Dollar Index to one-month highs at 94.30 where it reached a peak during Wednesday’s Asian session.
The USD pulled back later on, with risk appetite picking up and equity markets turning into positive territory to accelerate its retreat with the market welcoming a blue shift after Joe Biden took the lead in key states Wisconsin, Michigan and Nevada.
The close race, which might delay the final results and the chances that the Republicans take control of the Senate and block the fiscal stimulus plan are expected to keeping investors on guard. This is likely to support the US dollar in spite of the positive market mood.
Technical levels to watch
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