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USD/JPY moving with a bullish bias

FXStreet (Barcelona) - USD/JPY is trading at 108.43, up 0.37% on the day, having posted a daily high at 108.55 and low at 107.75.

USD/JPY is better bid on the 108 handle and the pair is moving in on yesterday’s highs with 108.80 as the bulls next probable challenge ahead. Whether this is the beginning of a counter rally to a short term bear trend is yet to be seen, but what is clear is that the Japanese government have provided a strong message that for now the weakness in the JPY vs. the USD has “gone far enough”, according to Jane Foley, Senior Currency Strategist at Global Financial Markets. This said, no central bank is bigger than the market and there is still the argument that USD/JPY was just in temporary overbought conditions and while left lingering in no mans land for too long a period of time, a series of profits were simply taken from the table and indeed this may just be a short term correction in the overall bullish trend. For instance, 112.00/60 is a target that RBS analysts have in mind and lower levels are a sighted as a good entry point. Let’s see what comes out of the FOMC minutes coming up shortly because this will be a good standing point as to where this pair moves from here for the time being.

USD/JPY note worthy levels

With spot trading at 108.42, we can see next resistance ahead at 108.48 (Weekly Classic S1), 108.55, 108.78 (Hourly 100 SMA), 108.91 (Daily Classic R1) and 109.08 (Hourly 200 SMA). Support below can be found at 108.36 (Daily Classic PP), 108.25 (Hourly 20 EMA), 108.14 (Daily 20 SMA) and 108.03.

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