USD/JPY Tries To Settle Above 148.50 As Traders Shrug Off Intervention Fears

Key Insights

• USD/JPY continues to rebound as traders remain focused on the dovish policy of the BoJ. 
• AUD/USD declined below the 0.6400 level amid a broad pullback in commodity markets. 
• EUR/USD is under pressure after the release of the Euro Area inflation reports. 

USD/JPY Gains Ground At The Start Of The Week

USD/JPY is currently trying to settle above 148.50 as the BoJ does not intervene. Traders stay focused on the ultra-dovish policy of the BoJ.

Today, traders had a chance to take a look at the Retail Sales and Industrial Production reports from Japan. Retail Sales increased by 4.5% year-over-year in September, compared to analyst consensus of 4.1%. Industrial Production declined by 1.6% month-over-month in September, while analysts expected that it would decrease by 1%.

USD/JPY is currently trying to settle above the resistance at 148.50. In case USD/JPY settles above this level, it will move towards the next resistance level, which is located at 149.10. A successful test of the resistance at 149.10 will push USD/JPY towards the key 150 level.

On the support side, the nearest support level for USD/JPY is located at 147.85. If USD/JPY manages to settle below 147.85, it will head towards the next support level at 147.50.

U.S. Dollar Is Moving Higher As Demand For Safe-Haven Assets Grows

U.S. Dollar Index gained strong upside momentum and tested the 20 EMA at 111.55. Chicago PMI declined from 45.7 in September to 45.2 in October, but this report had little impact on currency dynamics.

Traders will stay focused on the upcoming Fed Interest Rate Decision, which will be released on Wednesday. The yield of 10-year Treasuries has moved back above the 4.05% level, providing additional support to the U.S. dollar. In case Treasury yields continue to move higher, the U.S. Dollar Index will have a good chance to settle above the 20 EMA.

EUR/USD Is Under Pressure After Inflation Misses Expectations

EUR/USD moved below the 0.9900 level after the release of inflation data from the EU.

Euro Area Inflation Rate  increased from 9.9% in September to 10.7% in October, compared to analyst consensus of 10.2%. Euro Area Core Inflation Rate grew from 4.8% to 5%.

High energy costs put significant pressure on the European economy, and the ECB will be forced to raise rates aggressively. Meanwhile, concerns about the health of the European economy may continue to put pressure on the euro.

GBP/USD Tries To Settle Below 1.1500

GBP/USD pulled back towards the 1.1500 level as demand for riskier assets declined at the start of the week.

The general strength of the U.S. dollar served as the main catalyst for GBP/USD today. In case GBP/USD settles below the 1.1500 level, it will head towards the next support at the 50 EMA at 1.1440.

AUD/USD Is Losing Ground As Commodity Markets Decline

AUD/USD made an attempt to settle below 0.6370 amid a broad pullback in commodity markets. Traders prepare for the RBA Interest Rate Decision, which will be released tomorrow. The bank is expected to increase the interest rate from 2.6% to 2.85%.

Other commodity-related currencies are also moving lower at the start of the week. NZD/USD settled below the 0.5800 level, while USD/CAD moved back above 1.3650.

For a look at all of today’s economic events, check out our economic calendar.