- USD / JPY manages to attract some buying amid a decline in demand for the safe haven JPY.
- Political uncertainty in the US prevents USD bulls from opening new positions and could limit the pair’s rally.
- Investors await the release of the US ISM Manufacturing PMI to get some momentum.
Selling tone around Japanese safe-haven yen is helping the pair USD / JPY to rise again near one-week highs, around the 104.95 region, at the start of the European session on Monday.
After opening with a bearish gap at the beginning of a new week, the pair has captured some purchases near the 104.50 region and it has turned positive for the third day in a row. Despite growing market concerns about the economic consequences of new coronavirus-induced lockdowns in many Western countries, upbeat Chinese macro data has hit demand for traditional safe haven assets and they have been considered a key factor that has helped the USD / JPY pair to regain some positive traction.
China’s official manufacturing PMI released over the weekend showed that the manufacturing sector in the world’s second-largest economy expanded for the eighth consecutive month in October. Furthermore, a private survey on Monday showed that China’s manufacturing PMI rose to 53.6 points in October from 53.0 the previous month. The data boosted investor confidence, although uncertainty about the outcome of the US presidential election has limited optimism.
National opinion polls have been indicating a clear advantage for Democratic candidate Joe Biden. But nevertheless, Investors remain cautious as the gap is narrow in key battlefield states. This has prevented the USD bulls from opening aggressive new positions and limited any uncontrolled bullish movement for the USD / JPY, warranting some caution before positioning for any further upward movement.
Meanwhile, Monday’s release of the US ISM Manufacturing PMI could generate some boost to USD / JPY. Apart from this, market risk sentiment and developments around the coronavirus saga will also be taken into account to seize some significant business opportunities.
Credits: Forex Street
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