FxWirePro: USD/JPY capped between 5&10 DMAs, momentum studies neutral

• Risk-on rally in the equities was offset by poor Chinese manufacturing PMI reports. 
   
• Poor Chinese data and deteriorating investors’ sentiment likely to keep demand for the Yen intact.
   
• Data released earlier showed China Caixin Manufacturing PMI stood at 48.6 vs. 49.2 expected and 49.2 last.
   
• Data from Japan were better than expected. Japan Nikkei manufacturing PMI climbed from previous 47.8 to 48.1 in June.
   
• Japan May CPI came in at -0.4 % y/y versus -0.5% expected, while the BOJ Q2 Tankan Large Manufacturing Index: came in stronger at 6 versus 4 expected.
   
• USD/JPY has edged above 5-DMA at 102.72, but remains capped below 10-DMA at 103.50.
   
• Momentum studies, for now, are neutral, break above 10-DMA could see the pair higher.
   
• The pair is trading a falling channel since Jan 16' and has bounced off strong channel base support at 101.40.
   
• Break above 103.50 finds next major resistance at 104.87 (20-DMA). Major support below 102.72 (5-DMA) is seen at 101.20 (trendline and channel base). 
   
• Later in the NY session, US manufacturing reports from both the Markit and ISM will be in focus for fresh cues on the major.

Recommendation: Good to go long on break above 103.50, SL: 102.70, TP: 104/ 104.85