FxWirePro: USD/JPY slips below 107 handle, risk-off drags the pair lower

USD/JPY chart - Trading View 

USD/JPY was trading 0.23% lower on the day at 106.94 at around 05:00 GMT, outlook bearish.

US jobless claims were more encouraging than expected. Initial claims fell 99k in the week ended 4 July to 1.314k vs expectations of 1.375k.

Continuing claims fell 700k to 18.06m suggesting return to work is continuing despite the recent rise in COVID-19 cases.

However, the number of people claiming benefits under the Pandemic Unemployment Assistance program has risen exponentially, and this could negatively impact upcoming data.

The risk-off tone attributed to concerns that rising coronavirus cases would dent the still-nascent economic recovery keeps downside pressure.

Technical bias is turning bearish. The pair has been rejected at 4H 200 SMA multiple times raising scope for weakness. Upside capped at 21-EMA.

Lower Bollinger band is immediate support at 106.60. Scope for test of Double Bottom at 106. 

21-EMA is immediate resistance at 107.34. Decisive break above 200-DMA required for bearish invalidation.

Major Support - 106.60 (Lower BB)

Major Resistance - 107.80 (110-EMA)