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Forex pairs in this Article » USD/JPY
FXstreet.com (Athens) – The USD/JPY is trading slightly higher mostly due to the fact that the Nikkei gained ground (closed up 0.2%), as well as due to the fact that the American dollar doesn’t seem to be worried much about the emerging US debt-default.

USD/JPY on the upper level on Nikkei gains, greenback’s resilience to the default worries

The USD/JPY is trading upwards on Wednesday but the last couple of hours is being under increasing pressure amidst worries on the looming US default on its own debts. What’s more market participants could well attribute the cross upwards trend shift to the Nikkei gains, as it is widely known that the Japanese currency is heavily inversely correlated with the Nikkei index. Precisely, the last 20-day correlation between USD/JPY and Nikkei 225 Index is currently lying near 0.4947 (almost +0.50%).

Strategic Bias on the USD/JPY

From our technical perspective the technical area of major significance is around 98.80 level, where there are a lot of stops placed closing short-positions. Elaborating on, if these stops are being hit, a USD/JPY rally might come in focus. Needless to say, it is taken for granted that the bullish uptrend will be remain intact as long as the cross stands above its 21 – DMA at 98.20 area. Last but not least, the impetus might be greater, as long as the spread between 10-year UST/JGB widens.

Technical Aspects on the USD/JPY

Axel Rudolph, Head Technical Analyst at Commerzbank mentions that the “USD/JPY continues to trade around the 50% retracement at 98.58 while the six month resistance line at 99.64 is being targeted. While a challenge of the top of the recent range at 99.72/100.62 is plausible we look for this to hold.Potential dips should find minor support around the 97.50 late September low. Further down the 200 day moving average at 97.06 guards the seven month support line at 95.77.”
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