USD/JPY struggling for direction, trades flat below 103.00 handle

The USD/JPY pair remained stuck in a narrow trading band below 103.00, struggling to find direction, as uncertainty now seems to overshadow economics and is restricting any recovery for the pair.

Earlier during the day, the pair shrugged-off weaker-than-expected Japanese industrial production data and reversed from 103.00 level to test session low level of 102.50 region. However, during early US trading session, the pair erased all of its losses and turned flat after the release of better-than-expected Chicago PMI data.

Reaction to strong US data, however, was muted as political and economic implication of last week's historic Brexit referendum remains key overhang for market participants. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "The intraday technical picture has turned now neutral, as in the 1 hour chart, the price is between its 100 SMA, at 102.30, and the 200 SMA now at 103.60, both horizontal, whilst the technical indicators remain stuck around their mid-lines. In the 4 hours chart, a modest positive tone prevails, as technical indicators hold above their mid-lines. Still with the price below a sharply bearish 100 SMA at 104.30, the risk of a strong recovery remains limited, with the pair now waiting for a big catalyst, maybe US July's Payrolls next week, before being able to set a clearer directional tone."

"Support levels: 102.50 102.00 101.60
Resistance levels: 102.90 103.30 103.60"