FX News – July 23: USD Drops, JPY Gains; EUR/USD Could Break 1.3250

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The combined strength of the yen and the weak greenback caused the USD/JPY to slide further early in today's Asian session. After the initial rise in anticipation of the elections in Japan on Sunday, the pair has made a steady slide since yesterday when it finally fell below the 100.00 mark during the US session.

The yen received a bullish reaction after the LDP won 76 of the 121 parliamentary seats during Japan's elections over the weekend. This is seen to boost the 'Abenomics' economic policy championed by Japanese Prime Minister Shinzo Abe. Meanwhile, the greenback is still reeling from the dovish statement from US Fed Chairman Ben Bernanke last week. The combination of the two led to the drop of the pair in the past two days.

The USD/JPY pair is currently trading at 99.41, with initial resistance seen at 100.14, followed by 100.39. On the other hand, initial support is at 98.80, followed by 98.55.

Meanwhile, the EUR/JPY has also been affected by the yen's strength and greenback's weakness in this week's trading. After peaking at 132.22 just before the opening of the Asian session yesterday, the pair has dropped to as 130.82 in today's session. It is, however, making a steady climb to almost 131.40 at the moment, as it is currently trading at 131.36.

Initial resistance for the EUR/JPY is at 131.83, followed by 132.16. Meanwhile, initial support is at 130.72, followed by 130.40.

The EUR/USD has reached highs at 1.3215 during yesterday's US session, before settling around the 1.3180-1.3190 levels at the opening of today's Asian session. With nothing much happening in the market today in terms of events, analysts see a possibility of the pair going beyond the short-term resistance of 1.3205.

The EUR/USD pair is currently trading at 1.3190, with initial resistance seen at 1.3245, followed by 1.3278. Meanwhile, initial support is at 1.3161, followed by 1.3128.

By FX Strategy Team, Published on 23rd of July 2013
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