USD/JPY drops after US House of Representatives voted to impeach President Trump

• USD/JPY pulls back from the weekly high.
• US House of Representatives voted 230 yes on Abuse of Power, votes for Obstruction of Congress continues.
• Voting in the Senate will be sometime in January.

With the US House of Representatives voted to impeach President Trump on grounds of abuse of power, USD/JPY plummets to 109.60 amid initial trading session on Thursday.

The opposition Democratic party led voting had 230 votes saying that the Republican leader inappropriately used his powers while meddling into the Ukrainian politics. The second bill concerning the Obstruction of Congress is also likely to pass with the majority going against President Trump by the press time.

If passed, the bill will reach the Senate sometime during January and then will have to be approved that to make the US President Donald Trump the third in the history to get impeached.

However, the Republican majority in the Senate is likely to pour cold water on the Democrat-led movement.

Even so, the flight to risk-safety is likely to remain present. With this, the US 10-year treasury yields drop to 1.90% while the S&P 500 Futures also weakens.

Moving on, market players will keep eyes on the monetary policy decision by the Bank of Japan (BOJ). Ahead of the releases, analysts at TD Securities say, "The BOJ will hold its last meeting of the year. This should pass with little fanfare as the BOJ has made the necessary changes in October. As such, all policy levers should be left unchanged for its upcoming meeting. While the usual rhetoric around standing ready to ease will be repeated, this is hardly a pressing near-term threat and is par for the course BOJ-speak. At this time, the BOJ can take comfort in the improvement in JGB operations, recent fiscal stimulus, and a global CB pause to ride out 2019 on a quiet note."

Technical Analysis

Prices are again reversing from the key 109.75/80 area, which in turn can recall the sub-109.00 mark on the chart.