USDJPY Silver Forecast: Haven Rally Boosts Dollar and Metals

Key Events

• PMIs: Japan and US (Thursday)
• Tokyo Core CPI (Friday)
• Japanese Elections (Oct 27)
• US Elections (Nov 5)
• Technical Analysis: USDJPY, XAGUSD

The USDJPY rebounded sharply above 150, fueled by a stronger US Dollar driven by haven demand, easing expectations of US rate cuts, uncertainty in the upcoming Japanese and US elections, and rising US bond yields. A cooling of Tokyo's inflation toward the 2% BOJ target also contributed to the pair's rally.

Friday’s Tokyo CPI results could add more volatility, as inflation hovering around 2% raises questions about the Bank of Japan’s next move—a potential rate hike or a hold.  

Technical Analysis

USDJPY Forecast: 3Day Time Frame – Log Scale

Source: Tradingview

The USDJPY is climbing back toward the trendline connecting the lows of January 2023 and January 2024. Upside potential aligns with resistance levels at 153.80 and 155, which coincide with the 0.618 Fibonacci retracement of the drop between July’s 161.76 high and September’s 139.58 low.

Bearish Scenario: From the downside, given the momentum is reaching towards resistance and overbought levels, a pullback is expected to hold at support levels 149 and 147 respectively before tracing a bearish scenario once again.

Silver Forecast: 3Day Time Frame Log Scale

Source: Tradingview

Retesting 12 year highs, Silver is accelerating alongside the record gold rally, eyeing 40$/ounce. Silver’s bullish momentum is aligned with the upper boundary of a one-year up trending parallel channel.

After surpassing the $34.80 mark, the next resistance levels for silver are expected to align with $35.90, $37, and $40.

However, if overbought conditions trigger a pullback, support at $33 and $30 could hold before any deeper corrective scenario emerges.

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