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USD/JPY firmer, eyes on 118.50

FXStreet (Edinburgh) - The greenback Japanese yen continues to grind lower at the beginning of the week, pushing USD/JPY back to the mid-118.00s.

USD/JPY in 2-day peaks

The selling mood surrounding the JPY plus the better tone in the risk sentiment is pushing spot back beyond the 118.50 level, printing 2-day peaks at the same time. Markets seem to have largely bypassed the poor results from the Services/Composite Markit’s PMIs for the current month, collaborating with the ongoing USD upside. Jane Foley, Senior Currency Strategist at Rabobank, argued, “Although there is risk that continued USD strength could push back the timing of the Fed’s first hike and shake out long USD positions, on the assumption that US growth continues to outperform we see further potential for medium-term USD gains. We have revised up our 12 mth USD/JPY forecast to 125.00”.

USD/JPY levels to consider

The pair is now gaining 0.58% at 118.12 and a surpass of 118.97 (2014 high Nov.20) would target 119.00 (psychological level) en route to 119.77 (high Aug.9 2007). On the downside, the immediate support aligns at 117.58 (low Nov.24) followed by 117.36 (low Nov.21) and finally 117.00 (psychological level).

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