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USD/JPY heavy through critical support

FXStreet (Barcelona) - USD/JPY is trading at 105.90, down -1.07% on the day, having posted a daily high at 107.51 and low at 105.20.

Having made an aggressive move to the downside, the USD/JPY is purely being driven by risk aversion and is now planting its feet on the 106 handle. As far as events, the dollar will depend on end of year outcomes in respect to key data and then of course the anticipated FED action as the real driving force, given that the BoJ is expected to remain on its usual course. With retail sales out of the way disappointing expectations and weighing on the dollar, we will look towards Philly Fed, housing stats, Michigan consumer sentiment survey and Yellen’s speech at the end of the week. If indeed there are any upside surprises to come from any positive data or a sudden change of risk apatite, Karen Jones, chief analyst at Commerzbank explained, ideally, she would like the market to regain its 20 day ma at 108.52 in order to refocus on the topside.

USD/JPY noteworthy levels

Current price is 105.91, with resistance ahead at 106.01 (Weekly Classic S2), 106.06 (Daily Classic S3), 106.36 (Daily Classic S2), 106.67 and 106.71 (Daily Classic S1). Next support to the downside can be found at 105.20, 104.49 (Weekly Classic S3), 103.95 (Daily 100 SMA), 103.21 (Daily 200 SMA) and 101.00.

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