USD/JPY stays below 50% Fibo of Brexit drop

The USD/JPY pair is trading in the sideways manner just below 102.80 (50% of Brexit drop) after having failed to take out the same on Monday.

Unimpressed by stock market rally

The risk-on rally in the equity markets has failed to strengthen the offered tone around Yen. Moreover, major indices recovered sharply from the post Brexit lows. UK’s FTSE index in fact rallied to 2016 high on hopes the BOE would cut rates this summer.

However, USD/JPY pair continues to have a tough time taking out 102.80 (50% of Brexit drop). Prices did close above 102.80 on Thursday only to fall back below the same on Friday.

The spot currently trades around 102.40. Strength in Yen is weighing over Nikke index; which is trading 116 points or 0.74% lower on the day.

USD/JPY Technical Levels

The immediate hurdle is seen at 102.80 (50% of Brexit drop), above which prices could test 103.09 (10-DMA). A violation there could yield 103.75 (61.8% of Brexit drop). On the other hand, a breakdown of support at 101.85 (38.2% of Brexit drop) would expose 101.40 (June 27 low). Next major support is seen at 100.68 (23.6% Fibo).