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USD/JPY: Bulls firmly in control post FOMC

FXStreet (Bali) - USD/JPY continues to build up on recent gains, with Wednesday's FOMC-induced spike reaching its highest at 109.00, where a smattering of selling orders by Japanese exports/profit taking caused the pair to retreat towards 108.80 ahead of the Tokyo open.

A more hawkish-than-expected FOMC, with the statement reflecting the US is on course to meet both inflation and labor market targets, set the stage for a major USD rally across the board, with leveraged accounts and fast money the main player pushing the pair higher as the market starts to re-price the possibility of early rate hikes by the Fed.

Technically, Jim Langlands, Founder at FXCharts, notes: "With the short term indicators now pointing higher we may see a run above 109.00, and eventually back to 110.00 although ahead of Friday’s BOJ meeting it could be that the market wants to chop around current levels. No major policy changes are expected at Friday’s meeting. The downside will now see bids at 108.50, and I would be doubtful of heading below here today, although if wrong we could head back to 108.20."

Japan Foreign investment in Japan stocks: ¥178B (October 24) vs ¥-412.6B

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AUD/USD: Bearish engulfing day, downside risks building up

AUD/USD sell-off initiated post FOMC accelerated once again around the Tokyo open, sending the Aussie to a new low at $0.8760 as the market re-prices the chances of an early tightening cycle by the Fed.
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