USD/JPY: "increasingly neutral"
USD/JPY was capped today by resistance at the 55-day MA in the 99.35 area, but found support today around 98.70 (50% Fibo of the decline from May highs to June lows). Today the greenback stays in a narrow range.
The level of 98.15 remains a key one on the downside. The loss of it will turn the focus to 97.75, 97.50 and 96.10. On the upside the most important level to watch is the psychological mark of 100.00. Below this handle the bulls will keep feeling very uncomfortable. Further obstacles lie at 100.55 (top of the Cloud), 100.85 and 101.40/50.
We’ll likely get a negative set-up on the weekly chart. At the same time, Brown Brothers Harriman points out that “still, it’s a little bit hard to buy the yen at the moment. Japanese participants do not want to take positions ahead of a Japanese holiday on Monday, especially with Chinese GDP growth release that day.” OCBC Bank is turning “increasingly neutral” on USD/JPY in the near term given that stale bullish dollar bets globally may continue to see a capitulation in the near term. Japanese economic data keep gradually improving, but have little effect on the pair.
Chart. Daily USD/JPY