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Looking At A Key Resistance Zone

DOLLAR-YEN

USD/JPY went bid yesterday, as optimism surrounding POTUS' health/U.S. fiscal matters supported risk appetite, while the news that Japanese IT giant NEC will acquire Avaloq for Y236bn and Gotobi day flows applied further pressure to the yen. That being said, Monday's rally failed to bring about a convincing break of resistance from the 50-DMA/Sep 30 high at Y105.78/80.

  • With the rate trading flat at Y105.74, bulls look for a renewed push towards the aforementioned resistance zone, located just a few pips below the lower edge of the Ichimoku cloud (Y105.85) and the 50-EMA (Y105.87). A move above there would expose Sep 8 high of Y106.38. Conversely, a retreat under Oct 2 low of Y104.94 would turn focus to Sep 22 low of Y104.41.
  • Little of note on the Japanese calendar until Thursday's release of BoP current account balance and Eco Watchers Survey and Friday's publication of earnings/spending data.

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