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USD/JPY stuck below 120.40, awaits US data for fresh cues

FXStreet (Mumbai) - The USD/JPY pair keeps the offered tone intact during the European session; with the bulls unable to regain control as markets favour the yen ahead of the US trade data.

USD/JPY keeps range below 120.40

Currently, the USD/JPY pair trades -0.09% lower at 120.36, supported above hourly 50-MA. The USD/JPY pair trades around a flat line, unable to surpass 120.40 – stiff hurdle in the last hours, as the US dollar remains undermined versus the yen in anticipation of widening trade deficit in the US.

Attention now turns towards the key US trade data which may add to recent series of downbeat US macro releases and could also point towards deteriorating US economic outlook. The US trade data which is expected to reveal a deficit of $48 billion for August, against the gap of $41.9 billion seen in July.

While the downside in the USD/JPY remains capped amid increasing speculations that BOJ may roll out additional easing at its monetary policy decision due tomorrow.

USD/JPY Technical levels to consider

To the upside, the next resistance is located at 120.56-57 (Oct 5 and Today’s High) levels and above which it could extend 121.02 (Sept 17 High), above which the 200-DMA located at 121.38 holds key. To the downside immediate support might be located at hourly 50-SMA at 120.15. A break below the last, the pair could drop to 200-SMA at 120.06 and further to 119.22 (Sept 29 Low) levels.

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