USD/JPY gives away post-election gains and returns to 152.50

• The Dollar retraces the Asian session's gains and returns to the mid-range of 152.00.
• Investors are taking US Dollar profits ahead of key US releases this week.
• Political uncertainty in Japan suggestts that the BoJ will stand pat on Thursday.

The US Dollar has retraced most of the ground taken following the release of the Japanese election results, retreating from three-month highs at 153.75 to 152.50 so far.

The Yen dropped across the board during Monday’s Asian session as the elections in Japan delivered a significant defeat to the ruling party. The result opens an uncertain political scenario and puts into question the government’s support for the BoJ’s normalisation plans.

This scenario practically confirms that the Bank of Japan will keep interest rates on hold at its Thursday’s meeting.

The Dollar eases ahead of key US releases

The US Dollar, on the other hand, has opened the week on a somewhat softer tone. Investors might be trimming some USD longs, getting ready for a busy week, with US GDP. the PCE Prices Index and the Nonfarm Payrolls report, scheduled on the coming days.

The technical picture shows the broader bullish tone intact although the bearish divergence on the 4-hour RSI warns about a deeper correction. Supports are at Friday’s low, 151.60 ahead of 150.70. Resistances are 153.75 and 155.10.