USD/JPY: last minute attempt from the bulls with eyes on 111 handle again

Despite the sell-off in global stocks, USD/JPY has been in chop between the European lows of 110.60 and the Asian, overnight, highs of 111.06 with bulls taking back charge in the latter half of the NY session, moving out of a sideways drift to test the 110.80 level. 

Bulls have been held up on technical resistances while US yields underpin the dollar's upside as the spread favours the bullish trend and reversal of the late June downside from 110.75. Simultaneously, the dollar has picked up a safe haven bid as investors pull out of EMs and back Wall Street instead looking to safeguard idle capital. 

US data to see bulls through the 111 handle this week

From here, much will depend on fundamentals and supportive data to today's US manufacturing will lend support to the bulls case for the 111 handle and key targets there. 

(US June ISM manufacturing index 60.2 vs 58.5 expected, Markit US June manufacturing PMI 55.4 vs 54.7 expected).

We have the FOMC minutes on Thursday, (the pace of Fed balance sheet runoff increased to $40 Bln/month in Q3 (previous $30 Bln) dollar supportive as the dollar funding liquidity continues to get squeezed offshore), and the nonfarm payrolls on Friday while otherwise, the market's liquidity will continue to deplete due to the US holidays on Wednesday. 

USD/JPY levels

Bulls are back on top and look to May's 111.39 peaks for the week ahead. This 111.39 May high is in a congested area where the 161.8% of May low & 76.4% of the May drop was located. Further out, the 112.30's, (Fibos at 112.22/33) remain key upside target. On a bearish correction, below the 200-D SMA at 110.17, the Tenkan prop is located a cent lower at 109.19 that falls below the 109.36 key June support. 108.10 is the May 29 low.