Dollar is back under pressure in early US session on risk appetite as DOW opens mildly higher. The development suggests that consolidation from this week's low from 96.14 is going to extend further with another rebound. The greenback will likely continue to trade with a soft tone. Crude oil is lifted by strength in equities and recovers from intraday low of 71.44 to above 73 level. Gold, on the other hand, remains soft on China's comment and is trading around 1190.

China's State Administration of Foreign Exchange urged US to genuinely take measures to protect investors' interests and confidence as a responsible big nation. Though, SAFE affirmed that US government debts are relatively safe, liquid investments. SAFE said it's normal to increase or decrease holdings of US debts based on market conditions. Meanwhile, SAFE also reiterated gold will not become a main investment channel of its foreign exchange reserves.

Data released today saw Eurozone Q1 GDP finalized at 0.2% qoq, 0.6% yoy, unrevised from prior estimates. German factory orders dropped -0.5% mom, rose 24.8% yoy in May. Canadian Ivey PMI dropped sharply to 58.9 in June.

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 87.25; (P) 87.61; (R1) 87.89; More.

Intraday bias in USD/JPY remains cautiously on the downside for 86.96 support first. Break there will confirm that recent down trend has resumed and should target key support level of 84.81 low next. On the upside, above 88.19 will indicate that consolidation from 86.96 is still in progress and bring another recovery. But after all, upside is expected to be limited well below 90.27 resistance and bring fall resumption.

In the bigger picture, the break of 88.13 support confirms that medium term rebound from 84.81 has completed with three waves up to 94.97 already. The corrective structure in turn indicates that whole down trend from 2007 high of 124.13 is still in progress. Retest of 84.81 should be seen next and break will confirm down trend resumption for next key level of 79.75 (1995 low). On the upside, break of 94.97 resistance is needed to be the first sign of medium term reversal. Otherwise, we'll stay bearish.