USD/JPY: a shallow offer ensues at key levels despite improved risk sentiment

USD/JPY is testing the 20 sma at 102.45 having reached 102.88 highs on the steady rally from 100.67 in yesterday's trade.

USD/JPY has been a heavy bid on the back of investors getting behind the USD with sentiment back towards a bullish outlook for the US economy vs a backdrop of widespread and global uncertainties elsewhere. 

The Yen, however, is offered in its own right as markets look ahead towards possibly easing in the Japanese economy after news of Abe asked his cabinet to prepare a new stimulus package while at the same time, recent data showed that business development is under pressure in Japan with the machine orders for May coming in lower for the second month in row at -1.4% after plummeting in April when it fell by 11%. 

USD/JPY levels

USD/JPY has been capped at 102.80/90, but on a correction and bids that push through, the next level of interest comes as 103.55/103.90 being the 16th June low and 61.8% retracements of the Brexit sell off. 105.55 (May low) is the next major resistance level ahead of and the 106.87 24th January high on the wide. On a drop through the 100.00 psychological level, below 99.00 lies the 61.8% retracement of the move 2011 to 2015 at 94.75. For the meantime, the 20 sma on the 1hr supports at 102.45, followed y the 200 sma at 101.84.