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USD/JPY firmer above 123, eyes Tuesday’s high

FXStreet (Mumbai) - The USD/JPY pullback witnessed in Asia, gains further traction as we progress towards the European open, with the major climbing higher in sync with the US currency.

USD/JPY firmer above 123 handle

Currently, the USD/JPY pair trades 0.22% higher at fresh session highs of 123.14, heading for a retest of Tuesday’s high posted at 123.29. The pick-up in the demand for the US dollar on ‘buying on dips’ strategy ensued by markets ahead of the US NFP data, remains supportive of the USD/JPY pair.

Also, a strong rebound witnessed in the Chinese stocks boosted risk-sentiment, and thereby added to the upside in the major. China’s A50 index surged +5% while the Shanghai Composite index jumped over 2% and Hong Kong’s Hang Seng rallies 0.70% towards closing hours.

Meanwhile, the yen shrugged-off comments from BOJ Deputy Governor Iwata delivered in mid-Asia, as the focus now turns on the Fed Chair Yellen’s speeches due later in the US session. On the data-space, the US ADP jobs report will grab some attention ahead of Friday’s NFP.

USD/JPY Technical levels to watch

The prices remain bid and find the immediate resistance at 123.29 (Dec 1 High). A break above the last, the major could test 123.64 (Nov 19 High). While to the downside, the immediate support is placed at 122.81/79 (1h 100 & 200-SMA) below which 122.62 (Dec 1 Low) would be tested.

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