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USD/JPY: 122.23 guards downside ahead of Japan CPI's

FXStreet (Guatemala) - USD/JPY is currently trading at 122.60 with a high of 122.79 and a low of 122.49.

USD/JPY moves in a sideways fashion ahead of the Japanese CPI's. The BoJ may have defused the potential market attention to the outcomes of the results with their stubborn assessment of the economy being on track to meet the target of two percent in the given time frames.

Instead, the Yen is likely to benefit on risk aversion and safe haven flows against the backdrop of the BoJ and markets are more likely to concentrate on the US data to come of next month and subsequent decision making at the FOMC meeting in anticipation of a Fed hike.

"Recent data is not seen deterring the Federal Reserve from hiking rates next month. The US October personal consumption expenditure was disappointing, and prompted some downward revision to Q4 GDP forecasts. The Atlanta Fed estimates that Q4 GDP is tracking 1.8% rather than 2.3%. However, the decline in the weekly jobless claims, the rise in the flash service (Markit) PMI, and better durable goods orders helped mitigate the impact," - explained analysts at BBH.

Year end repatriation flows should also be a lesser factor taken into consideration that are usually supportive to the greenback at this time of year.

USD/JPY levels

Technically, below the 122 handle comes the 121.78 100 DMA and 200 DMA at 121.42. The psychological 120 level is a key target and the 118.00 level comes as core objective in the medium term. 122.23 is the key support guarding the immediate downside. The upside could be limited to the 18th August highs of 124.46 through the cluster of MA's and business between July and end of August rising channel.

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