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USD/JPY consolidates above 107.00

FXStreet (Edinburgh) - The greenback is stronger on Tuesday, currently taking USD/JPY back above the 107.00 handle after bottoming out in fresh 5-week lows in the 106.80 neighbourhood.

USD/JPY trimming losses

Spot is now trading on a firmer tone, with the US dollar trying to recover part of yesterday’s pullback from the mid-107.00s to the area of 106.80, levels last seen in mid-September. In the data front, the NFIB index, which tracks the Business Optimism in the US economy, is due later on in the NA session, ahead of tomorrow’s Industrial Production figures in Japan and key US Retail Sales. “Given the improved risk sentiment which was so obvious in the BoP (increased outflows to foreign bonds), USD/JPY remains a buy on dips. But dips for us are way down in the 105.50/106.50 range. So we maintain a neutral stance for another week – collapsing US yields and a lazy long USD/JPY market position suggest waiting for better levels to buy in coming sessions”, noted analysts at Westpac.

USD/JPY key levels

As of writing the pair is up 0.26% at 107.11 with the next resistance at 108.58 (20-d MA) ahead of 109.46 (high Sep.19). On the flip side, a breach of 106.81 (low Sep.18) would expose 105.45 (high January).

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