FXStreet (Mumbai) - The USD/JPY pair is currently seen gathering pace to pierce through the 120 barrier at one go, having failed a couple of times near the last.
USD/JPY: Supported at 20-DMA
Currently, the USD/JPY pair trades modestly flat at 119.91, attempting another run towards 120 handle. The major extends its winning streak into a fourth day on Wednesday and defends the bids on the 20-DMA support located near 119.80 region, as the Japanese yen remains undermined after below estimates Japan’s trade balance data.
The trade deficit shrank from JPY569.7 billion in August to JPY114.5 billion in Sept. Markets had expected a trade surplus of around JPY87 billion in the reported month.
Further, the USD/JPY pair derives support from Tuesday’s impressive housing starts numbers from the US, which adds to the recent series of upbeat US fundamentals and could revive Dec Fed rate hike options. The US housing starts rose 1.21 million in Sept versus an expected rise of 1.14 million.
Meanwhile, the macro calendar for today remains absolutely quiet and hence, the major will take cues from the broader market sentiment.
USD/JPY Technical levels to consider
The pair has managed to surpass the h1 200-SMA at 119.56 and now trades above the 20-DMA, eyeing the next resistance located at 120/120.06 (round number + 50-DMA) beyond which 120.33 (daily R2) could be tested. Above the last, the pair could climb further towards 120.50 (psychological levels). While to the downside immediate support might be located at 119.58/56 (h1 50 & 200-SMA), below which 119.28 (h1 100-SMA) could be exposed. A breach of the last, the pair could drop to 119/118.80 (round number + Oct 16 Low).
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