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USD/JPY has extended its weekly decline to 103.35, a fresh 8-month low, consolidating weekly losses amid persistent tensions surrounding the US presidential election. The pair is maintaining its strong bearish bias ahead of the Nonfarm Payrolls report, FXStreet’s Chief Analyst Valeria Bednarik briefs.

See – Nonfarm Payrolls Preview: Forecast from five major banks for October jobs report

Key quotes

“President Donald Trump gave a speech late Thursday, claiming fraud and a rigged election. The media is calling it his ‘most dishonest speech,’ and several networks interrupted their broadcasts. Meanwhile, ballots’ counting continues in a few states where the two contestants are neck-to-neck. The dollar remains under strong selling pressure across the board.”

“Japanese data came in better than anticipated, although still indicating economic contraction. Labor Cash Earnings were down by 0.9% YoY in September, while Overall House Spending was down 10.2%. The focus now shifts back to the US, as the country will publish the NFP report, expected to show that 600K new jobs were added in October. The unemployment rate is seen contracting to 7.7% from 7.9%. As it happens with most data released these days, the most likely scenario is that it will be overshadowed by the election’s woes.”

“The 4-hour chart shows that the USD/JPY pair keeps sliding below all of its moving averages, with the 20 SMA accelerating south below the larger ones. Technical indicators, in the meantime, resumed their declines after a modest corrective advance, back again in oversold levels.  March 12 daily low at 103.07 is the immediate support level, with further declines expected on a break below it.”