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  • USD/JPY stages a modest intraday bounce of around 25 pips from 200-hour.
  • The uptick runs out of the steam near a three-day-old descending trend-line.
  • Disappointing ADP report failed to impress bulls and capped any further gains.

The USD/JPY pair found some support near 200-hour SMA and staged a modest intraday bounce of around 25 pips from mid-105.00s, or weekly lows set earlier this Wednesday.

The uptick lacked any strong follow-through and quickly ran out of the steam just ahead of a three-day-old descending trend-line resistance amid sustained USD selling. The USD remained depressed following the disappointing release of the ADP report, which showed private-sector employment in the US increased by only 167K as against consensus estimates pointing to a reading of 1500K.

The pair has now retreated back closer to the lower end of its daily trading range. Some follow-through weakness below mid-105.00s will be seen as a fresh trigger for bearish traders and set the stage for further intraday slide. The pair might then accelerate the fall back towards challenging the key 105.00 psychological mark with some 
intermediate support near the 105.30-25 region.

Meanwhile, technical indicators on the daily chart maintained their bearish bias and have again started drifting into the bearish territory on hourly charts. The set-up remains firmly in favour of bearish trades and support prospects for an eventual breakthrough the mentioned support.

On the flip side, bulls are likely to wait for a sustained strength beyond the trend-line resistance, currently near the 105.90 region, before positioning for any further appreciating move. The pair might then witness a fresh bout of the short-covering move and accelerate the momentum back towards weekly tops, just ahead of mid-106.00s.

USD/JPY 1-hourly chart

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Technical levels to watch