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CitiFX: 5 reasons for a pullback in USD/JPY

CitiFX closed its USD/JPY long from 105.99 at 108.37. Analysts are now looking for opportunities to buy the pair on further dips. 

They outline the following reasons for a pullback in USD/JPY:

1)    USD/JPY rally is capped by the trend resistance from the 2002 highs;

2)    USD index is testing the 84.75-85.17 resistance with a bearish divergence;

3)    US 5-, 10- and 30-year yields are likely to consolidate before hitting new highs later;

4)    USD/JPY moved away from the US-Japan relative curve spread;

5)    G10 JPY index indicates short-term JPY strength, peaking at the Dec. 2013 levels.

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