USDJPY tumbles to weekly lows under 145.50 as USD sinks

• Greenback turns sharply on a surprise moved, US yields also sink.
• US votes a new Congress and governorships.
• USDJPY could post lowest daily close in a month.

The USDJPY accelerated the decline on Tuesday amid a broad-based USD decline and also amid a rally in Treasuries. The pair bottomed at 145.47, hitting the lowest intraday level since October 27. It is hovering near the lows, under pressure, and starting to look at the 145.00 critical support.

And suddenly… a free fall

It was a quiet session, with markets looking how US votes, when the greenback turned sharply lower with no particular trigger. The DXY turned negative and broke under 110.00. It is down for the third consecutive day, now looking at October lows. The US 10-year fell from above 4.20% to 4.15% while the US 2-year dropped from 4.71% top 4.67%, the lowest level since Friday.

US mid-term elections are taking place with Republicans poised for a victory according to the latest polls that could give them full control of Congress. People are voting to elect one third of the Senate, all seats of the House of Representatives, and more than 30 governors. Biden’s administration agenda is at risk.

Regarding US economic data released on Tuesday, the NFIB Business Optimism Index declined in October to 91.3 from 92.1. On Asian hours, Chinese inflation numbers are due and on Thursday US CPI, a report that will weight on expectations about Federal Reserve’s monetary policy.

Looking at 145.00

The slide in USDJPY has taken the 145.00 area back into the radar. A firm break below could trigger more losses, with no much support until 143.80. The mentioned area could also prompt a rebound of the USD. It is a critical level. On the upside, the bearish pressure will fade if the pair rises above 147.00.