USD/JPY technical analysis: Dives out of ascending channel ahead of China GDP

• USD/JPY looks south after rising channel breakdown. 
• Upbeat China data needed to bail out the USD bulls. 

USD/JPY is on the defensive ahead of key China data, due for release at 02:00 GMT. 

The currency pair fell 0.55% to 107.89 on Friday, confirming a downside break of a rising channel from the June 25 low of 107.68. 

The rejection at the 50-day moving average resistance on July 9-10 followed by the rising channel breakdown indicates the path of least is to the downside. 

The drop to the immediate support at 107.53 (July 3 low), however, may remain elusive if China’s gross domestic product (GDP) data for the second quarter beats estimates, boosting demand for riskier assets and sending the anti-risk JPY lower across the board. 

The GDP data will be released along with the industrial production and retail sales figure for the month of June. 

As of writing, the pair is trading at 107.86, representing marginal losses on the day.

Daily chart

Trend: Bearish

Pivot points