USD/JPY: catching a bid in Tokyo open through 100.50 resistance

USD/JPY, big through 100.50 resistance in Tokyo, is caught between risk-off play around the concerns over the European banking sector and the U.S. presidential race, while at the same time, investors are looking for opportunities of yield on positive news. 

Wall Street picked up today on the back of a surprisingly bullish outlook for the US economy coming of yesterday's presidential debate between Trump and Clinton and the feelings were that Clinton clinched a lead on the first round of three debates, two of which will take place next month, and with Clinton being more predictable than Trump, markets favoured a risk on play overnight and supported in a bid in the major. However, the European banking sector remains a spanner in the works and is preventing USD/JPY taking off. 

"The way USD/JPY jumped around during yesterday’s debate shows that FX markets have a strong view on the “better” candidate," explained analysts at ANZ, adding, "So while it’s neck and neck, expect volatility within existing trading ranges, with few prepared to stick their necks out and go full bore one way or the other."

USD/JPY levels

Current price is 100.51, with resistance ahead at 100.53 (Daily High), 100.57 (Daily Classic PP), 100.64 (Hourly 100 SMA), 100.89 (Daily Classic R1) and 101.00 (Yesterday's High). Next support to the downside can be found at 100.43 (Daily Open), 100.42 (Hourly 20 EMA), 100.32 (Monthly Low), 100.32 (Weekly Low) and 100.26 (Daily Low).

Meanwhile, Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, technical indicators present sharp bearish slopes within negative territory, while the price develops well below its 100 and 200 SMAs, both in the 100.50/70 region. "Still, and considering that Asian share markets may follow the lead of Wall Street and advance early Wednesday, the downward risk is seen limited, as long as the price holds above the 100.00 level."