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

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account.

FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.

FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.

GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.