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USD/JPY still capped by 110.00

FXStreet (Edinburgh) - The greenback is now easing some ground vs. the Japanese yen, pushing USD/JPY back to the 109.40/35 band, posting at the same time fresh intraday lows.

USD/JPY focus on the BoJ

Traders seem to have now digested the very positive results from the US labour market last Friday, with Payrolls climbing to 248K in September and the unemployment rate ticking lower to 5.9%. Absent data in the US economy today will leave market participants waiting for tomorrow’s BoJ monetary policy meeting, although the broader consensus does not expect any announcement. Price action in spot will thus hinge on the USD mood, as this was the constant in recent periods. In the view of analysts at BBH, “If we are right, the dollar does not really trend against the yen except for the movement from one trading range to another, then the lower end of the new trading range appears to have been set, at least on a preliminary basis at JPY108. This also means that the JPY110 level is not the top end of the range. We suspect the upper end of the range will be closer to JPY115, though we wouldn't preclude some overshoot”.

USD/JPY levels to consider

The pair is now retreating 0.37% at 109.35 with the immediate support at 109.05 (Tenkan Sen) ahead of 108.36 (low Oct.3) and finally 108.30 (21-d MA). On the upside, a breakout of 109.85 (high Oct.6) would open the door to 109.91 (high Oct.3) and then 110.09 (2014 high Oct.1).

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