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USD/JPY languishes near lows, around 119.85

FXStreet (Mumbai) - The USD/JPY pair remains offered in the early European dealings, as markets continue to assess the Chinese trade data while a sharp drop in the US treasury yields also keep the major undermined.

USD/JPY hovers below hourly 200-SMA

Currently, the USD/JPY pair trades -0.16% lower at 119.84, having breached Oct 9 Low and posted session lows just below 119.82. The USD/JPY pair remains pressured as the persisting risk-off sentiment re-ignited by weak Chinese import data continues to underpin the yen.

Moreover, weakening shorter as well as longer duration US treasury yields also add to the downside bias in the major. The benchmark 10-year yields drop 2% to 2.058% while the 2-year yields plunge -2.48% to 0.629%.

The latest dismal Chinese trade data revokes concerns over China slowdown and its impact on the global economic outlook and thereby add to the latest chatter of the daily in the Fed rate hike.

Meanwhile, markets will track the broader markets sentiment ahead of Chinese inflation and the US retail sales data due for release tomorrow.

USD/JPY Technical levels to consider

To the upside, the next resistance is located at 120.06 (hourly 200-SMA) beyond which 120.26 (daily R1) could be tested. Above the last, the pair could climb further towards 120.48/51 (daily R2 & 50-DMA). To the downside immediate support might be located at 119.64 (daily S2), below which 119.22-21 (Sept 29 & 24 Lows) could be exposed. A breach of the last, the pair could drop to 118.83 (Sept 8 Low) levels.

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