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USD/JPY drops further, testing 120.30

FXStreet (Edinburgh) - The Japanese yen continues to gather traction vs. its American counterpart on Tuesday, with USD/JPY now falling to the 120.35/30 band.

USD/JPY weaker ahead of US data

The pair is trading on a softer tone and testing weekly lows in the 120.30 area so far, coming down from recent tops in the mid-121.00s in response to a renewed buying interest around the safe haven JPY.

Next of relevance in the pair will be US Durable Goods Orders and Consumer Confidence, all ahead of tomorrow’s FOMC meeting. On the Japanese side, the BoJ gathering on Friday will be the main event following the Fed, with market speculations growing bigger on the possibility of further easing.

USD/JPY levels to consider

At the moment the pair is retreating 0.66% at 120.28 with the next support at 118.55 (23.6% Fibo of 125.28-116.46) followed by 118.47 (2-month uptrend) and then 116.16 (low post PBoC move Aug.24). On the other hand, a breakout of 121.50 (high Oct.23) would open the door to 121.86 (100-day sma) and finally 123.20 (76.4% Fibo of 125.28-116.46).

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