FxWirePro: USD/JPY hovers around 23.6% Fib, further weakness on cards

USD/JPY chart - Trading View 

USD/JPY was trading 0.06% higher on the day at 109.52 at around 04:50 GMT, after closing 0.41% lower in the previous session.

The major is extending weakness inside the daily cloud, slips below 23.6% Fib, more downside on cards.

Data released overnight showed the preliminary reading of US Q2 GDP figures eased below 8.5% market consensus to 6.5% QoQ, versus 6.4% prior.

Resurging covid fears weigh on the market sentiment and put a safe-haven bid under the US dollar. However, downbeat data and stimulus optimism keep upside limited.

Focus now on the US Core Personal Consumption Expenditure Price Index for June, which is expected at 3.7% YoY versus 3.4% prior, for further impetus.

Technical analysis supports downside in the pair. Price action is hovering above cloud base support. Breach below cloud will drag the pair lower.

Next major support below cloud lies at 110-EMA at 109.07 ahead of 200-week MA at 108.86. Failure to break below cloud negates any further bearishness.