FX Action: USD-JPY has settled in the lower 109.0s
FX Action: USD-JPY has settled in the lower 109.0s, so far holding comfortably within yesterday's range, lacking directional bias. The pair has been in a bear phase for some six weeks, a period of sporadic bouts of risk-off sentiment, which last week produced a six-week low at 108.60, though downside momentum has since waned, with declines below 109.00 having proved fleeting. The 14-day RSI momentum indicator has been showing "bearish divergence" (rising over the last 10 days or so even when spot posted fresh lows), which is taken by technical analysts as portending a trend shift. Much will depend on messages that central bank policymakers give at the Jackson Hole symposium for near-term direction. Analysts expect a collective message of patience with regard to monetary policy normalization, which may be negative for the yen, as such a scenario would like spark a rally in global stock markets. USD-JPY has support at 108.60-63, and resistance at 109.50-52.