USD/JPY Price Forecast: Remains close to 20-day EMA

The Japanese Yen (JPY) trades higher against the US Dollar (USD) on Thursday. In the European trade, the USD/JPY pair is down 0.3% to near 157.90. The pair faces selling pressure as the US Dollar underperforms due to fears that United States (US) Republicans would struggle to continue their policies after a setback in midterm elections against Democrats.

As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, is down 0.25% to near 101.24. The DXY is close to its monthly low of 101.10 posted the previous day.

Analysts at ING said Democrats sweep would likely “lead to gridlock on the debt ceiling, a prolonged government shutdown next year”, ING said. The bank further warned that “fears of tougher regulation could weigh on Artificial Intelligence (AI) stocks (we’ve recently seen how that can hit the greenback)”.

On the economic front, investors shift their focus to the US Nonfarm Payrolls (NFP) data for October, which will be released on Friday. The NFP data is expected to have a significant impact on Federal Reserve’s (Fed) monetary policy expectations.

USD/JPY Technical Analysis

In the daily chart, USD/JPY trades at 157.93. The pair is hovering around the 20-day exponential moving average (EMA) at 157.90, leaving the near-term bias broadly neutral.

The Relative Strength Index (RSI) at 50.66 sits near the midline, hinting at a lack of directional conviction after recent swings, with neither bulls nor bears in clear control for now.

On the downside, initial support is seen at the 20-day EMA near 157.90, a break of which would expose further weakness toward recent lows if selling pressure accelerates. On the topside, with no nearby technical resistance levels from the provided dataset, traders may look to psychological round numbers and prior swing highs beyond the current price as the next areas where upside attempts could start to encounter supply.