USD/JPY struggling for direction, turns neutral ahead of US ISM PMI

The USD/JPY pair struggled for a firm direction and seesawed between tepid gains / minor losses within 40-45 pips broader trading range.

Currently trading in neutral territory around 111.35 region, investors seem to wait for an update on the US manufacturing sector activity, with the scheduled release of ISM manufacturing PMI due in a short while from now. 

A subdued price-action surrounding the key US Dollar Index failed to provide any additional boost to the pair's recovery move from session low. Meanwhile, buoyant sentiment surrounding equity markets pointed to improving investors' risk appetite and was seen denting the Japanese Yen's safe-haven appeal, thus resulting into the pair's range-bound action on Monday.

   •  USD/JPY near term neutral – UOB

Apart from the US economic docket, speeches by various FOMC members - New York Fed President William Dudley, Philadelphia Fed President Patrick Harker and Richmond Fed President Jeffrey Lacker, would also be looked upon for short-term momentum play during the NY trading session.

Technical levels to watch

Valeria Bednarik, Chief Analyst at FXStreet notes, "the pair is trading between the 100 and 200 SMAs, with the shortest capping the upside around 114.40, and the longest providing support at 109.20. Technical indicators in the mentioned chart diverge from each other, with the Momentum recovering and the RSI heading south, both within negative territory. Shorter term, the 4 hours chart shows that the 100 and 200 SMAs keep heading south above the current level, whilst technical indicators have turned flat within neutral territory. Renewed selling pressure below 111.00, will likely favor additional declines towards the 110.10 level, last week low."