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USD/JPY eyes ¥102.70-80 region
The dollar has raced to its highest level since the beginning of June, after a remarkably strong US GDP reading for Q2 that exceeded expectations.
Q1 figures were revised up to -2.1%, so the picture on the US economy is a brighter one. It is not rapid progress, but rather a steady kind of progression. Meanwhile ADP numbers showed weaker-than-expected job growth, at 218K rather than the expected 230K, and down from the 288K seen last month.
Looking at USD/JPY, the bounce today has carried us well away from the 200-day moving average, but now we need to clear the ¥102.70-¥102.80 region from the beginning of June. The daily relative strength index is recording an overbought reading, which leads to the possibility of a retracement in the coming days. Beyond the June high of ¥103, the ¥104 level should prove to be resistance.
On the downside, the close confluence of the 50-, 100- and 200-DMAs should provide ample opportunity for support, with ¥101 beyond that.