USD/JPY reverses a big figure drop, back above 101.00

The USD/JPY pair trade volatile so far this session, with the yen paring back some gains as risk-off moods cool-off a bit in the mid-European session.

USD/JPY: Will the recovery sustain above 101 handle?

Having witnessed a freak spike to 101.78 in Asia, the major fell more-than 100-pips to hit session lows at 100.75, where it found solid support and bounced back above 101 handle. USD/JPY is last seen exchanging hands around 101.15 levels, recording a +0.12% gain on the day.

The latest pullback in the dollar-yen pair can be largely attributed to easing risk-off sentiment as the European equities recover losses from Deutsche bank-led broader market sell-off. While some fresh buying interest seen behind the US dollar versus its major peers, also aids the recovery in the spot.

Markets now look forward to a fresh batch of US economic releases due later in the NA session, while sentiment around the US stock markets will also play a crucial role going forward.

USD/JPY Technical levels to watch 

In terms of technicals , the immediate resistance is located at 101.84 (weekly high). A break above the last, the major could test 102 (round figure) and 102.41 (Aug 29 high) beyond the last. While to the downside, the immediate support is seen at 100.75 (daily low), next at 100.62 (Sept 29 low) and below that at 100.50 (psychological levels).