JPY

Both USD/JPY and EUR/JPY have sold off over the past week and with the BoJ policy review expected in a couple of weeks, Yen-strength scenarios seem to be gaining steam.

Yen weakness has hung around and USD/JPY and GBP/JPY both retain bullish appeal. But for those looking for Yen-strength, perhaps in anticipation of next month’s policy review from the BoJ, EUR/JPY could hold greater attraction.

Yen-weakness has remained through Japanese general elections and both EUR/JPY and GBP/JPY have put in clean breakout moves from ascending triangle formations.

The 150 level had held as resistance in USD/JPY until this week’s US open, at which point another DXY-fueled breakout appeared. The next major level up is the same that held multi-year highs in the pair in Q4 of each of the past two years.

For FX traders the USD/JPY backdrop has been full of intrigue for the past couple years, and that story isn’t yet over as the pair nears the spot that’s been the scene of some major drama in the pair after the build of the carry.

USDJPY, Silver Forecast: As the U.S. dollar strengthens and uncertainty persists around monetary policies, elections, and geopolitical tensions, both USDJPY and Silver are proceeding through the third week of October on a positive note.

The USD extended its bullish trend this week but perhaps the larger focal point was Gold, defending 2600 and continuing the rally. For next week, USD/JPY resistance and EUR/USD pullbacks are in focus.

USD/JPY has shown a strong trend after the false breakdown at 140.00 last month. And price action has shaped the narrative, with many proclaiming the return of the carry trade even as the Fed is expected to cut heavily next year.

Just last week USD/JPY was re-testing a key low at 141.69. A week later after a strong NFP report and many are proclaiming the return of the carry trade, even with the Fed expected to continue cutting rates through the end of next year.

It’s been a fast start to Q4 for the US Dollar. The turn in EUR/USD was a big driver yesterday and today, USD/JPY has taken over with buyers continuing a strong bounce from the Monday low.

USD/JPY put in a massive sell-off last Friday and that looked similar to carry unwind themes of a couple months ago. But price found support at a key spot to start this week and another bounce theme is now underway.