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Forex: USD/JPY finishes slightly lower after trading in narrow range

FXstreet.com (Barcelona) - The USD/JPY finished the day down 16 pips at 97.75. Most of the declines came early in the Asia session (note Japan was closed) with the pair having traded as low as 97.34 before finding support where it casually drifted higher until mid way through the US session but stalled out around the 98.20 area. Japan will be be open again in the coming session, with both Industrial Production and Retail Trade to be released at 23:50 GMT.

According to analysts Geoffrey Yu and Gareth Berry at UBS, “The yen was again net bought on the week, with asset managers continuing to lead the way. Hedge funds also showed USDJPY liquidation but by their standards the amounts were not extreme. The daily distribution of flow was quite telling: heading into Thursday investors were broadly flat USDJPY but on Friday there was a mini-capitulation once it became clear the BoJ were not going to deliver anything new that could surprise that market. We also note that gross volumes in USDJPY were also the lowest in four weeks, and this was the same for JPY trades as whole.”

The FXStreet.com Trend Index remains Slightly Bearish on the 1 hour time frame, while the OB/OS Index reads Neutral. Also note, price closed below the 20dma for the first time since April 5th (this is a bearish development that should be monitored going into coming sessions). Initial resistance is sitting at 98.47 (previous support, now resistance on daily chart), followed by 98.81 (the 9dma). First support sits at 97.34 (low previous day), followed by 96.80 (previous resistance, now support on daily chart).

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