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USD/JPY consolidating to the downside, below 118.50

FXStreet (Mumbai) - The USD/JPY pair struggles to extend the recovery towards 119 handle in the mid-European session, as the bears remain in control after the prices presented symmetrical triangle bearish break on daily charts.

USD/JPY clings to the daily S1

Currently, the USD/JPY pair trades -0.38% lower at 118.39, keeping the bearish pressures intact. The major runs through fresh supply on every attempt to overcome 118.50 levels – hourly R1 and hovers below the last, as fading Fed rate hike bets continue to dampen investors’ confidence, thus keeping the pair undermined.

However, the risk-on rally seen in the European indices did provide some support to the USD/JPY pair and lifted the prices from lows struck at 118.10 in the morning trades.

Looking ahead, the dollar-yen pair awaits the US economic data including the crucial US CPI and Philly Fed manufacturing figures for further cues on the Fed interest rates outlook.

USD/JPY Technical levels to consider

To the upside, the next resistance is located at 118.84 (hourly 20-SMA) beyond which 119.09/17 (daily pivot & high) could be tested. Above the last, the pair could climb further towards 119.32 (hourly 50-SMA). To the downside immediate support might be located at 118.10 (daily lows), below which 117.08 (daily S3) could be exposed. A breach of the last, the pair could drop to 116.46 (Aug 24 Low).

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