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USD/JPY stuck in a range above 118.00 handle

The USD/JPY pair extended its range-bound price action, within 50-pips trading band, as investors digested recent US Dollar up-surge to the highest level in nearly 14-years. 

Currently trading in neutral territory, around 118.10-15 region, a mild greenback retracement has failed to assist the pair to extend its bullish trajectory beyond Thursday's over 10-month high level of 118.66. Meanwhile, the prevalent risk-on mood surrounding equity markets has failed to benefit the Japanese Yen's safe-haven appeal and provided little impetus for the major, confining the pair in a narrow trading range. 

Looking at the broader picture, Friday's move could be categorized as consolidation following a strong up-move, led by hawkish Fed outlook, to the highest level since early Feb. Moreover, short-term indicators are already pointing to near-term overbought conditions and hence, the pair needs to pause or witness a brief corrective slide before the next leg of directional move. 

Later during NA session, building permits and housing starts data from the US might be looked upon for short-term trading impetus, ahead of the next big event risk, BOJ monetary policy decision on Tuesday. 

Technical levels to watch

Immediate downside support is seen at 117.90 level, which if broken is likely to drag the pair towards 117.50 intermediate support ahead of 117.00 round figure mark. On the upside, fresh buying interest above 118.50 immediate resistance should open room for further appreciating move towards 119.00 round figure mark.
 

 

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