BUZZ-COMMENT-Relief doubts, ISM stall dollar's recovery vs yen

Aug 3 (Reuters) - USD/JPY rebounded toward its mid-July range base at 106.635 on Monday, but mixed ISM July manufacturing data and coronavirus relief bill doubts may make clearing resistance in the 106.60s difficult ahead of key economic news this week.

The rebound from last week's oversold dive that failed to breach major supports by 104 has been fueled by a short-squeeze and M&A flows . Monday's 106.47 EBS high also neared the 21-DMA and weekly kijun at 106.66/70.

Meanwhile, RSIs have rebounded to neutral readings, relieving more short-squeeze pressure.

ISM beat overall expectations, led by new orders and production clearing 60, leaving employment the laggard at 44.3 versus 42.1 previously . As elevated weekly jobless claims and the rise in continuing claims last week indicated the employment situation remains dire, putting a spotlight on Wednesday's non-manufacturing ISM, Thursday's claims data and Friday's non-farm payrolls report.

This comes as new U.S. coronavirus relief remains in limbo . With the exception of March's dive, buying dips below 105 has worked well since 2018, but 10-year Treasury-JGB yields spreads are now at 40-year lows.

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(Randolph Donney is a Reuters market analyst. The views expressed are his own.)

((Randolph.donney@thomsonreuters.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.