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USD/JPY looks ready to extend its uptrend!

Before moving on, ICYMI, today’s Asia-London session watchlist looked at MATIC/USD’s short-term channel in anticipation of a light trading calendar. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

U.S. to lift restrictions for fully vaccinated international travelers beginning Nov. 8

SEC gets path to rein in stablecoins as U.S. weighs new rules

Asian stocks rallied following Wall Street’s record highs though worries about China’s property sector weighed on sentiment

Raw material supply problems hurt German industrial exports – Ifo

Gold eases on dollar uptick as investors await policy cues

Upcoming Potential Catalysts on the Forex Economic Calendar:

U.K.’s CBI realized sales at 10:00 am GMT
U.S. house price index at 1:00 pm GMT
U.S. CB consumer confidence data at 2:00 pm GMT
U.S. new home sales at 2:00 pm GMT

If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.

What to Watch: USD/JPY

USD/JPY 1-hour Forex Chart
USD/JPY 1-hour Forex Chart

There were not a lot of market-moving data released during the Asian session but traders were happy to nudge major dollar pairs by a few pips as they take on more risks.

I’m not seeing major data releases scheduled during the U.S. session so it’s possible that we’ll see more risk sentiment-focused moves in the next few hours.

USD/JPY, in particular, could get attention as it flirts with the 114.00 psychological area after finding support from a trend line that’s been around since late September.

Speculations of major central banks being more hawkish or at least more aggressive than the Fed in responding to high inflation has dulled the dollar’s shine in the last few days.

If USD/JPY traders take their cues from the moving average crossover on the 1-hour time frame, then we could see the dollar trade below its trend line support. The 113.40 area of interest is a good target if you’re looking for short-term goals.

But if central bank statements from the Bank of Canada (BOC) or the European Central Bank (ECB) assure traders that Governor Powell and his team are still on top of their stimulus game, then USD can strengthen further against its major counterparts.

USD/JPY can head to its October highs or even head up to the 115.00 levels.