USDJPY, Silver Analysis: 50-bps Cut Stabilizes Dollar, Lifts Metals

Key Events:

USDJPY holds above the 140-mark despite 50 bps rate cut
Silver climbs back above 31 with the rate cut boost
Gold sets a record high at 2600
BOJ monetary policy in focus on Friday for USDJPY volatility

USDJPY Analysis: USDJPY – 3 Day Time Frame – Log Scale

Source: Tradingview

Beyond the 50-bps cut decision, the US Dollar index retested July 2023 lows and held its grounds over the December 2023 low (100.50). Consequently, the USDJPY pair maintained its grounds above the 140-barrier and retested the 144-resistance at the mid-level of the extended parallel channel.

The oversold state of the relative strength index (RSI) indicator is supporting a bullish reversal as well ahead of the BOJ policy rate and statement. The USDJPY scenarios remain in the following manner:

Bearish Scenario

A close below the 140-barrier can support a drop in the USDJPY towards the 137-support and 130-128 support zone respectively.

Bullish Scenario

A close above 144 can boost an uptrend towards levels 147 and 150 prior to confirming an overall bullish scenario for the USDJPY. The primary trend above the 150-barrier can confirm a possible uptrend continuation for the pair.

Silver Analysis: XAGUSD – Daily Time Frame – Log Scale

Source: Tradingview

Following Gold’s lead towards a new all-time high, which rebounded from the psychological 2600 barrier, Silver is trading back above the 31-barrier and above the expanding consolidation that has been trending between May 2024 and September 2024. Following that bullish breakout, a close above 31.50 is expected to boost silver prices back towards the 2024 high at the 32.50 level.

The next point in sight following the yearly high is the 33-barrier, as it aligns with the 0.618 Fibonacci extension level between the low of January 2024 (21.92), high of May 2024 (32.50), and low of August 2024 (26.60). From the downside, corrections are expected to hold at the 30-29.70 zone. Deeper retracements below that range are expected to re-align with the 27.80 support.

With an uncertain atmosphere around US elections, geopolitical tensions, and monetary policies, the primary uptrend trend on safe haven assets is expected to proceed.

--- Written by Razan Hilal, CMT – on X: @Rh_waves

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.