USD/JPY lacks strength to recover

USD/JPY is bouncing from fresh weekly lows near 105.50, while other major currencies are flirting with fresh multi-month highs against the American currency, the risk is skewed to the downside. On the data front, Japan July’s Jibun Bank Services PMI came in at 45.4 from 45 in June. US ADP survey and ISM Non-Manufacturing PMI are coming up next, FXStreet’s Chief Analyst Valeria Bednarik briefs.

Key quotes

“Japan published the July Jibun Bank Services PMI, which came in at 45.4, from 45 in the previous month. The upcoming US session will bring the ADP survey on private employment creation for July, foreseen at 1.5M from 2.36M in the previous month. Markit will publish the final version of the Services PMI for the same month, while the country will unveil the official ISM Non-Manufacturing PMI, expected at 55 from 57.1 in the previous month.”

“The Japanese yen lags when compared to other assets, but its bearish potential is clear. The 4-hour chart for USD/JPY offers a neutral-to-bearish stance, as the pair is trading below all of its moving averages, with the price now struggling to recover above a bullish 20 SMA. Technical indicators are trying to recover some ground, but lack enough strength, holding just below their midlines.”