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USD/JPY: re-takes 120 on BOJ easing prospects

FXStreet (Mumbai) - The major found fresh bids near 20-DMA and bounced in another run toward the 120 barrier and subsequently beyond 50-DMA located at 120.06.

USD/JPY bounces-off 20-DMA

Currently, the USD/JPY pair trades 0.11% higher at 119.99, having posted session lows at 119.81 in last hours. The major picked-up strength and retest 120 handle in a bid to extend beyond it as the bulls appear to ignore the weakness in the European stocks and continue to cheer the upbeat US housing starts data.

While the downbeat Japan’s trade data released earlier on the day, reinforced beliefs that the BOJ could roll out further easing next week in a bid to spur economic growth. The trade deficit shrank from JPY569.7 billion in August to JPY114.5 billion in Sept. Markets had expected a trade surplus of around JPY87 billion in the reported month.

Meanwhile, the USD/JPY pair will remain underpinned on the back of divergent monetary policy outlooks amid a data-deficient trading session today.

USD/JPY Technical levels to consider

The pair has managed to surpass the 120 barrier and now heads towards next resistance located at 120.33 (daily R2). Above the last, the pair could climb further towards 120.50 (psychological levels). While to the downside immediate support might be located at 119.81/80 (session lows & 20-DMA), below which 119.65/56 (h1 50 & 200-SMA) would be tested.

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