It’s a quiet one on the FX front as we look to the session ahead. Most dollar pairs are within a change of less than 10 pips and have changed less than 15 pips on the day thus far. The less than 20 pips range for EUR/USD reflects a lack of interest to start the day and may not be much to work with at all when we get to European trading later.
The standout mover to start the week remains the Japanese Yen, following Sanae Takaichi’s victory to become Prime Minister. As mentioned earlier, that is a big fiscal dove and this is leading to a weaker currency as traders bet on a BOJ rate hike by the end of the year.
USD/JPY is above the 150.00 mark and this is a big win for buyers which marked a daily close above yesterday. That being said, we have been in this situation before.
In late July, the pair closed at 150.72 before falling back below 150.00 the next day and back into the previous consolidation range. On the week, the 100-week moving average at 149.65 remains the important line in the sand. But if buyers can hold a break above 150.00 in the coming days, it will breathe confidence into the opening of the next leg for the pair. At least from a technical perspective.
Apart from this, other major currencies are not much higher to start the week. The dollar gained some ground in European trading yesterday, but lost most of it in US trading thereafter. The Euro was boosted by French political concerns, but EUR/USD is still holding near 1.1700 as we look ahead to the new day.
