USD/JPY is making small upside progress after the strong US Michigan sentiment data. A 121.47 high has been recorded, although momentum is a struggle due to heavy Japanese offers. Interest is noted from 121.50, 121.60/65 and ahead of 121.75 option triggers.
Price action are to be expected, led by EUR/USD movement, although central bank support has led to choppy price action at the lows. The JPY crosses have experienced some weakness, with EUR/JPY seeing the biggest move off the overnight high. Some of the other movers in the European morning, such as AUD/JPY, NZD/JPY and GBP/JPY have improved from their lows, leaving a mixed tone ahead of the weekend.
Position adjustment and book cleaning activity are expected to influence the remainder of the session. As a result we see little scope for a decent trend. USD/JPY should retain its upside bias, yet we do not expect 122.00 to come under pressure until next week should orderly price action continue. Buy on dips remains the theme.
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