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USD/JPY back off lows, just below flat

FXStreet (London) - With USD/JPY making a daily high and low at 108.89 and 108.25 respectively, spot is currently trading at 108.81, down -0.03% on the day so far.

Japanese banks were closed for Autumnal Equinox Day, and there was also no Japanese data overnight too. This afternoon has seen light US data, with only US Markit PMI marginally missing forecasts at 57.9/ 58.

USD/JPY to 120?

The Deutsche Bank FX research team note that it has paid to be a Yen bear, and they see no reason to change their view. They write, “Capital outflows are starting to accelerate after a quiet first half, helped along by the large portfolio changes in public pension funds. Base money divergence between the BoJ and Fed is speeding up, and the Abenomics machine remains in full swing ahead of the end-year consumption tax decision. Potential PRDC re-hedging demand combined with safe-haven unwinds as yen basis widens and GPIF re-allocation all have the potential to push the market into year-end. “ They strongly believe that we could be seeing 115-120 USD/JPY in 2015.

USD/JPY Technicals

The FXStreet OB/OS Index is reflecting neutral hourly conditions, while the FXStreet Trend Index is slightly bearish. RSI is in neutral territory at 72.34, up from it’s last hourly close at 45.59, while ADX is ranging above 30 at 26.33, down from 38.03 at the last hourly close.

Meanwhile, daily RSI is in neutral territory at 83.62.

A climbing 200 SMA on the hourly USD/JPY chart is currently at 108.82, up from 107.87 at the previous close. Over the past 20 days, the exponential average closing price is 106.51, and trending higher.

USD/JPY Levels

Spot is presently trading at 108.80, and next resistance can be seen at 108.84 (Daily Open), 108.89 (Daily High), 108.90 (Daily Classic PP), 109.03 (Monthly High) and 109.03 (Weekly High).

To the downside we see next support at 108.67 (Yesterday's Low), 108.64 (Hourly 20 EMA), 108.62 (Hourly 100 SMA), 108.60 (Daily Classic S1) and 108.44 (Weekly Classic PP).

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