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Forex pairs in this Article » USD/JPY (Barcelona) - Having declined from its five year high at 105.43, USD/JPY continued its slide overnight, before finding support above the psychological 104 level and gently retracing.

USD/JPY declined on repatriation expectations

With Japan on holiday, and the subsequent lack of demand from Japanese funds and importers, the pairs declined, having edged into overbought territory yesterday combined with expectations that Japanese investors will move to repatriate profits or trim foreign exchange exposure at the start of the year. This afternoons series of Fed speeches represents the only event of significance on the economic calendar, but Jamie Coleman of FXBeat comments “It could be a long Friday. The US data calendar is nearly barren and the East Coast of the US is being belted by a major blizzard. Markets should be thin and potentially whippy today.”

What are USD/JPY’s key technicals?

Applying a Fibonacci Retracement to yesterdays decline from 105.43-104.09, the pair is now finding support at the 76.4% retracement mark at 104.42 where S1 also lies at 104.38. The hourly 200 SMA provides resistance at 104.85, with the 20D EMA offering support at 103.96, just below yesterday’s low and S2 at 104. Hourly RSI sits at 38, having climbed from oversold territory, while on the daily chart the opposite is true - moving lower at 66 from overbought yesterday. A Dark Cloud Cover Candlestick pattern can also be seen on the daily chart.
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