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Karen Jones, analyst at Commerzbank, suggests that USD/JPY’s rejection from the 50% retracement at 108.43 (of the move down from April) and the mid September high at 108.48 is gaining momentum and the market has reached the 50% retracement at 106.47.

Key Quotes

“Failure here will target 106.00 then 105.32/78.6% retracement, which is the last defence for the 104.46 August low. Minor resistance is offered by the 107.70 20 day ma and we are increasingly viewing the recent high at 108.48 as an interim top.”

“The market stays offered below the 200 day ma at 109.10. The 200 day ma guards the 55 and 200 week moving averages at 110.04/31.”