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USD/JPY breaches Tuesday’s low, heads towards 122.20?

FXStreet (Mumbai) - The bullish pressure on the JPY keeps mounting as we progress towards early European morning, knocking-off USD/JPY further towards daily S1 placed at 122.60.

USD/JPY: Risk-off intensifies, Nikkei drops further

Currently, the USD/JPY pair trades -0.22% higher at fresh session lows of 122.65, moving further from 123 handle. The major came under renewed selling pressure during the late-Asian trades after losses in the Japanese stocks accelerated with the Nikkei sliding -1.17%.

Moreover, the yen remains underpinned versus its US counterpart on the back of recent series of upbeat Japanese macro data, which signalled the efforts by the country’s authorities are finally paying-off. On Tuesday, Japan’s Q3 GDP expanded to 0.3 against a 0.1% increase expected. While core machinery orders unexpectedly rose 10.7% in Oct versus a drop of -1.5% predicted, thereby indicating a delayed pick-up in capital investment.

Meanwhile, markets ignored Chinese CPI data and now await the European open for further cues in the pair. While trading is expected to remain light in absence of significant macro data on the cards today.

USD/JPY Technical levels to watch

The prices drop to lows and find the immediate support placed at 122.44 (Dec 4 low) below which 122.23 (Nov 25 low) would be tested. To the top-side, the immediate resistance is now placed at hourly 200-SMA (123.02). A break above the last, the major could test 123.42/47 (Dec 8 & 7 high).

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