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USD/JPY drops to 120.30 as Asian stocks pare gains

FXStreet (Mumbai) - The USD/JPY pair failed to defend mild gains and fell back in the red in the early European trades, as yen regained lost ground somewhat on retreating Asian indices.

Holds above hourly 50-SMA

Currently, the USD/JPY pair trades -0.11% lower at fresh session lows of 120.32, unable to extend beyond 120.57 daily highs. The Japanese currency found renewed strength near 120.50 region and dropped to fresh highs versus the US dollar as a sudden shift in the risk conditions was witnessed as Asian equities pared gains.

Among the Asian indices, the Nikkei receded gains and now trades 0.53% higher towards closed, while Australia’s ASX with moderate gains, up 0.33%.

Moreover, the US dollar continues to suffer from the recent set of downbeat US macro data including the NFP print and Monday’s services PMI reports.

Looking ahead, the major will be influenced by the risk-off/risk-on market profile while the upcoming US trade data due later today and tomorrow BOJ decision will be closely eyed.

USD/JPY Technical levels to consider

To the upside, the next resistance is located 120.64 (Sept 22 High) levels and above which it could extend 121.02 (Sept 17 High). To the downside immediate support might be located at 119.22 (Sept 29 Low) below that at 118.83 (Sept 8 Low) levels.

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