USD/JPY: risks still tilted to the downside technically, eyes on June's low

Currently, USD/JPY is trading at 110.40, up 0.03% on the day, having posted a daily high at 110.50 and low at 110.31.

USD/JPY is firmer in Tokyo despite briefly dipping below 110.00 overnight. The dollar was up at the end of the US session on slightly benign US data and a drop in WTI by 3%. However, the political uncertainties in both Japan and the US are supportive to risk-off currencies such as the yen ahead of the main event at the end of the week for the dollar being nonfarm payrolls. We will have a potential prelude to that event in the ADP report for Jul that is expected to come in at 195k from 158k in Jun.

USD/JPY levels

USD/JPY: Minor resistance will be seen at the session high at 110.58

Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, the risk is towards the downside, given that the 100 SMA has crossed below the 200 SMA well above the current level. "Technical indicators hover directionless within a negative territory. June's low of 108.80 is still a possible bearish target, with speculative interest probably taking some profits out of the table once reached."