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Forex pairs in this Article » USD/JPY
FXstreet.com (Athens) – The USD/JPY has been trading slightly upwards the last couple of hours, but risk off sentiment regarding looming tightening on behalf of China is still on ‘play’ button across the board.

USD/JPY struggles on Friday, as Nikkei dropped by 2.8%, Chinese jitters on ‘play’

While the USD/JPY is trading softly upwards the last couple of hours in the midst European trading session, the cross is still under pressure as market participants focus on the Chinese jitters on tightening. To elaborate on, despite the encouraging UK GDP release as well as the dismal German IFO, market participants seem to shrug off the data releases, concentrating totally on the risk aversion mode carried from the Asian session. Briefly, China fixed the 7-days Shibor at 4.89pct (up 140bps on the week- the highest level since July), sparking fears among traders that the tightening is ‘sooner’ than ‘later’ in the second largest economy all over the globe. Needless to mention, the heaviest selloff of the Nikkei index in 2 ½ months, put even more pressure on the cross as it is widely known that USD/JPY and Nikkei index are highly positively correlated.

Technical Aspects on the USD/JPY

Karen Jones Head Technical Analyst of Commerzbank says that the “USD/JPY has eroded the 200 day ma at 97.35, and sold off to the 4 month support line at 96.95, this guards the current October low at 96.55 and the six month support line at 95.93. The market has been contained in a large contracting range for the past 6 months and currently we have no real indication that the market is ready to break down through 95.93, but there is scope to test this level.Rallies will find minor resistance at 98.48 ahead of 99.01/06 last weeks high.”
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