USD/JPY Analysis: Returns to 106.40
|Despite showing high volatility on Tuesday, USD/JPY had returned near the 106.40 mark by Wednesday morning. The first part of the session was allocated to bulls who pushed the rate 91 pips higher to the 107.20 area.
The US inflation report drove the market in the opposite direction, thus allowing for fall down to the weekly PP at 106.40. Given that the Greenback moved below the 55– and 100-hour SMAs, this bearish movement might continue in this session, as well.
The nearest support of significance is the 200-hour SMA at 106.20, while the 105.80 area is restricted by the weekly S1. The pair should eventually edge higher towards the weekly R1 and the monthly PP near 107.50, as no other resistance levels that could limit further advances are located in between.
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