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USD/JPY bad news already priced in to Japan - Scotiabank

FXStreet (Guatemala) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank noted that USD/JPY has traded to a fresh six-session low, but is trading well within the range of the November 19/20 trading range of 116.82 to 118.98.

Key Quotes:

"There was limited data released today from Japan; however Friday’s Asian session will see a slew of data."

"Inflation is expected to drift down to 3%y/y on headline, 2.9%y/y ex fresh food and 2.2%y/y ex food and energy; retail trade, industrial production and household spending is expected to be weak. A lot of bad news is priced in for Japan, leaving the larger risk an upside surprise”.

“Any downside pressure in USD/JPY is likely to be prove temporary, the upward trend remaining the overarching theme."

"USD/JPY short‐term technicals: mixed, with conflicting signals and the candlestick pattern warning of an attempt to turn USD/JPY lower, it provides a cautionary tone; however a true USD/JPY signal won’t be generated unless there is a break below the November 19th open of 116.86, providing core support; while resistance comes in at the recent high of 118.98."

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