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USD/JPY finds buyers at 107.60 daily kijun

FXStreet (Bali) - USD/JPY failed to gather any upward momentum on Monday, and after an early Asian upside gap paid as high as 108.32, the pair reverted course to see a slow grind lower towards 107.60 in Europe, only to bounce back to 107.80 in late American hours, as US equities recouped early losses.

Soft data in the US, including Oct 2014 US Markit services PMI flash, which came at 57.3 vs 58.0 exp, and Sept 2014 US pending home sales, standing at 0.3% vs 0.5% exp MoM, resulted in a broadly weaker USD - despite moves were contained - with traders in no mood to reset long USD exposure ahead of Wed's FOMC risk event. If that was not enough reason to discourage trading activity, the BOJ also meets this week, although consensus remains for another uneventful outcome, with the Central Bank still in a 'wait and see' mode despite pressure to do more to assist the economy is building.

From a technical perspective, the daily kijun line, converging with the 20-day EMA, provided solid support at 107.60, allowing buyers to still perceive the retracement as no technically damaging for now. Even if further setbacks occur, dip buying interest should remain solid - 107.00 represent daily cloud top and 50-day EMA - to keep the pair in what might be seen as a developing 105.00-110.00 range in coming weeks. Expect stagnant and fairly choppy price activity for the next 48 hours, until FOMC headlines hit the wires.

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