FXstreet.com (Barcelona) - The USD/JPY managed to recover an initial drop to 78.10 in the opening hour of the Asian session, however was unable to surpass resistance at 78.50 by the end of the session. Since then, the pair has eased back down towards that earlier daily low, where it currently tests support ahead of mid-day despite an all-around calm market environment.

With the fundamental focus on the US debt talks which seem to have made little progress over the weekend despite the looming Aug. 2nd deadline, analysts at Talking-Forex.com suggets: ?The downward bias is expected to dominate this week as investors continue to speculate whether the recently announced measures by EU leaders is enough to promote stability, and whether lawmakers in the US finally put their differences aside and agree to raise the debt ceiling. Still, the fact that the pair is trading firmly below the psychologically important 80.00 level may raise speculation that the BoJ may intervene to weaken the currency.?

They add: ?In terms of technical levels, supports are seen at 78.22/00 and then at the historic low at 76.25. On the other hand, resistance levels are seen at 78.74, 79.03 and then at 79.32, which is also the Tenkan Line.?