USD/JPY Analysis: Falls to 38.2% Fibo at 111.17

Due to overall weakening of the Dollar triggered by the negative US PPI release and the ECB Minutes, the currency rate began moving downwards and was stopped only at the weekly S3, which is located slightly below the 38.2% Fibonacci retracement level. It should be noted that in the process the pair has formed minor descending channel. In order to recover and reach the opposite side of this pattern, the rate would need to cross a combination of the monthly S1, weekly S2 and the 55-hour SMA. From this perspective, the Yen most probably will continue to gain value against buck. However, the above retracement level still remains strong support barrier especially on daily timeframe. In addition to that, the southern side is backed by the three-month low located at the 110.84 mark.

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