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USD/JPY still unable to surpass 100.00

FXstreet.com (Córdoba) - The US dollar failed once again to overcome the 100.00 level against the yen, despite the G20 gave green light to BoJ easing measures as according to Aso and Kuroda, members understood they are aimed at fighting deflation.

"USD/JPY made a high of 99.90 early in the Asian session, but has consolidated since then despite much talk of Japanese insurance companies shifting allocation away from JGBs in favour of foreign bonds", says the TD Securities team. "The 100 threshold should remain in focus in the coming sessions, where a breach should see some sharp buying, while a rejection could see a slide below 99".

In fact, disappointing US housing data helped to undermine sentiment and sent USD/JPY briefly below 99.00 at the beginning of the New York session. However, the cross managed to bounce afterward and consolidates above 99.00.

Technically speaking, USD/JPY short-term indicators have turned negative, but the positive tone prevails in bigger time frames. Nevertheless, with daily charts correcting from overbought levels, the pair may have to wait before gathering enough strength to break above 100.00.

On the other hand, repeated failure at the key resistance level, could make bulls hesitate and put further pressure on USD/JPY. The 98.20 is the key support area on the downside, where the 23.6% retracement of the 92.72/99.94 rally stands.

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