USDJPY climbs above 146.80 as the traction is returning in the risk-off profile. (Pivot Orderbook analysis)

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• USDJPY climbs above 146.80 as the traction is returning in the risk-off profile.
• US yields are advancing after hawkish commentary from Fed policymaker Barkin.
• Japanese administration is set to approve more stimulus and hike taxes for ultra-wealthy individuals.

The pair currently trades last at 146.74.

The previous day high was 147.57 while the previous day low was 146.08. The daily 38.2% Fib levels comes at 146.65, expected to provide support. Similarly, the daily 61.8% fib level is at 147.0, expected to provide resistance.

The USDJPY pair has given an upside break of the sideways profile in the Tokyo session. Earlier, the asset resurfaced from 146.40 in the early Tokyo session. The risk profile is turning sour as investors are turning cautious ahead of the outcome of the US mid-term elections.

The mighty US dollar index (DXY) has refreshed its day’s high at 110.40 as the risk aversion theme is gaining traction. Mild gains recorded in the S&P500 futures have been eased as the risk appetite is shrinking. The 10-year US Treasury yields have reached 4.23% after hawkish guidance from Richmond Federal Reserve (Fed) President Thomas Barkin.

Fed policymaker has contrary views to the chatters over a slowdown in the pace of rate hikes. Current interest rates are near the proposed one at 4.80% and smaller rate hikes will be witnessed ahead. Fed Barkin believes that the ongoing pace of rate hiking will continue as inflationary pressures have not displayed signs of exhaustion yet.

The outcome of the US mid-term elections seems to favor the Republicans. A note from ANZ Bank states that “We regard a Republican-controlled Congress as the most likely scenario (55%). Not far behind, at 41%, is a split Congress, with a Republican-led House and a Democrat Senate.” An occurrence of the same could bring political instability to the economy.

On the Japanese yen front, Tokyo bulls are facing pressure as Japanese Prime Minister Fumio Kishida is set to approve USD198 billion in the additional budget for the economic stimulus plan, as reported by Bloomberg. The government also “may opt to hike taxes on ultra-wealthy individuals with annual incomes of more than JPY1 billion ($6.8 million).”

Technical Levels: Supports and Resistances

EURUSD currently trading at 146.74 at the time of writing. Pair opened at 146.59 and is trading with a change of 0.1 % .

The pair is trading below its 20 Daily moving average @ 147.89, above its 50 Daily moving average @ 145.11 , above its 100 Daily moving average @ 140.48 and above its 200 Daily moving average @ 132.17

The previous day high was 147.57 while the previous day low was 146.08. The daily 38.2% Fib levels comes at 146.65, expected to provide support. Similarly, the daily 61.8% fib level is at 147.0, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 145.93, 145.26, 144.44
• Pivot resistance is noted at 147.41, 148.24, 148.9

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