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USD/JPY testing hourly 100-SMA, 123 in sight

FXStreet (Mumbai) - A renewed bout of buying interest was seen around the US dollar, driving USD/JPY to fresh session highs few pips shy of 123 handle.

USD/JPY boosted on USD comeback

Currently, the USD/JPY pair trades 0.20% higher at fresh session highs of 122.88, heading towards 123 handle. Having closed the bearish opening gap, the major witnessed renewed buying wave as the US dollar continues to benefit from the persisting risk-off environment spurred by Paris terror. The US dollar appears to act as a risk-off currency.

The US dollar gained further momentum against the yen after the sentiment on the European stocks was spooked by Paris attacks while the yen suffers from increased BOJ easing bets after the Japanese economy entered a technical recession. The Japanese economy dived deeper in contraction, falling -0.2% over the quarter, against forecast of a 0.1% drop.

In the day ahead, markets will continue to digest Paris bombings news amid a data-quiet US calendar while Tuesday’s US CPI figures remain in focus now.

USD/JPY Technical levels to watch

The prices test 122.88 (1h 100-SMA) and from there could extend gains to 123 handle. A breach of the last, the prices would head towards 123.45/50 (Nov 10 High/ psychological levels). To the downside, the immediate support in sight at 122.23 (Today’s Low) below which 122 (round number) would be tested. A break below the last, 121.85 (20-DMA) comes into the picture.

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