Home USD/JPY stays depressed below 103.00 amid fresh challenges to risk, Georgia runoff eyed
FXStreet News

USD/JPY stays depressed below 103.00 amid fresh challenges to risk, Georgia runoff eyed

  • USD/JPY remains on the back foot after refreshing 10-month low the previous day.
  • US-China tussle, Hong Kong activists’ arrest challenge risks off-late.
  • Vaccine hopes, expectations of Democratic victory weigh on the US dollar.
  • Risk catalysts remain key ahead of US ADP Employment Change, FOMC minutes.

USD/JPY drops to 102.62, down 0.05%, as markets in Tokyo open for Wednesday’s trading. The yen pair marked the heaviest losses in over five weeks on Tuesday as the US dollar stayed on the slippery ground amid a risk-on mood. Recently, chatters concerning the Sino-American tussle and coronavirus (COVID-19) vaccine seem to direct the quote lower as traders await the key results from Georgian elections that will decide the ruling party for the US Senate.

Georgia’s too close to call exit polls keep traders on toes…

New York Times back the “Flip a coin” move for both Georgia Senate results as Republicans and Democrats are head-to-head with each other to take control of the future US decisions. Republicans currently hold 50 seats in the Senate and Democrats have 48. If Joe Biden’s Democratic Party wins Georgian elections, as markets root for, there will be a tie and recently elected US Vice President Kamala Harris may vote for the decision, which in turn undoubtedly favors can Democrats.

Read: Georgia voters evenly split over who should control US senate

Elsewhere, US President Donald Trump signed an executive order to stop business with eight Chinese applications while the New York Post conveyed the news of China’s blocking the COVID-19 origin’s investigations. Additionally on the risk-negative side are chatters over arrests of dozens of Hong Kong activists for violating national security law and also on suspicion of state subversion.

On the contrary, The Times’ news that the UK will have millions of COVID-19 vaccines soon follows the US Food and Drug Administration (FDA) results showing over 95% success rate for leading covid vaccines to back the risks and weigh on the US dollar.

It should, however, be noted that Japan’s domestic conditions concerning the covid have been worrisome off-late. “Prime Minister Yoshihide Suga said Tuesday he will make a final decision Thursday on a plan to declare another state of emergency in Tokyo and three neighboring prefectures,” said Kyodo News.

Against this backdrop, S&P 500 Futures gain 0.20% while Japan’s Nikkei 225 search for a clear direction around 6,660 and Australia’s ASX 200 drops 0.25% by press time.

Looking forward, global markets keenly eye Georgian election results with likely support for Democrats’ victory. Meanwhile, the US ADP Employment Change and FOMC Minutes can also offer intermediate direction, mostly to the downside, to the USD/JPY prices.

Technical analysis

A downward sloping trend line from July 31, currently around 102.50, can offer breathing space to the USD/JPY bears amid oversold RSI conditions. Though, the expected corrective pullback is may not be considered serious unless breaking a confluence of 21-day SMA and monthly resistance line near 103.50.

 

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.