FxWirePro: USD/JPY extends range trade, upside capped at 110-EMA

USD/JPY chart - Trading View 

USD/JPY was trading largely muted on the day at 107.56 at around 05:30 GMT, with session high at 107.85 and low at 107.51.

The pair trades comatose between 110 and 21 EMAs. Breakout will provide a clear directional bias.

Price action is extending sideways grind along 55-EMA and technical indicators suggest more scope for downside than upside.

Spot tracks broad US dollar weakness after US President Trump's softer stance on China boosted risk appetite. 

While Trump withdrew Hong Kong's special status, he did not mention new tariffs or the end of phase one of the trade deal with China.

Price action is within cloud and below major moving averages. RSI is biased lower and Stochs are on verge of rollover from overbought levels.

The pair has bounced off Kijun Sen on Friday's trade. Resumption of weakness will see dip till cloud base at 106.70. 

Break above 110-EMA will see upside. Bearish invalidation only above 200-DMA. Focus on U.S. ISM Manufacturing PMI for further impetus.