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EUR/JPY continues to find bids near the 130.00 area

FXstreet.com (Barcelona) - The Euro/Yen continued its decline today, sliding another 58 pips to close at 130.70 but again holding support just above the 130.00 area for a third straight trading day.

According to Marc Chandler, Head Currency Strategist at BBH, “appreciation pressure on the yen may be coming from the unwinding of short yen hedges by equity investors. Many of the foreign investors who have poured almost $80 bln into Japanese equities this year have hedged the currency risk by selling the yen. However, given the slide in Japanese share prices, they may now be over-hedged. They need to buy the yen to reduce the hedge.”

From a technical perspective, the short term moving averages on the daily chart are now in a slightly bearish set up, with price close below both the 9 and 20dma’s. Furthermore, the 9dma is now sloping downward and appears to be attempting a bearish cross beneath the 20dma which could be a sign selling pressure is likely to increase. Initial support sits at 130.00 (low price area of previous 3 days), followed by 127.92 (the 50dma). Initial resistance sits at 130.99 (the 20dma), followed by 131.65 (the 9dma).

Flash: We still think dips to 1.0300 area in USD/CAD are a buy - TD Securities

According to Shaun Osborn, Chief FX Strategist at TD Securities, “quiet trading reflects holiday markets (UK and US closed). USD/CAD is trading in a tight range so far today around the base of the bull channel that has guided that market up form the early May lows. Bull trend momentum has clearly waned a little on the short-term oscillators but the broader bias remains USD-constructive as far as we are concerned."
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