USD/JPY extends recovery move, eyeing to reclaim 109.00 handle

The USD/JPY pair build on it early up-move and has now moved back closer towards reclaiming the 109.00 handle.

A mildly positive sentiment surrounding European equity markets pointed towards improving investors' risk-appetite and was seen weighing on the Japanese Yen's safe-haven appeal. 

This coupled with a follow through pull-back in the US treasury bond yields further supported the US Dollar's recovery move and collaborated to a strong bid tone surrounding the major.

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With today's up-move, the pair has now reversed all of its previous session's losses, but remains within the weekly trading range around the very important 200-day SMA. 

Looking at the broader picture, the pair has struggled to register any meaningful recovery from multi-month lows. Moreover, every attempted recovery move has been facing fresh supply and hence, the recent price-action could be categorized as a consolidative phase before the next leg of directional move.

The pair remains at the mercy of broader market risk-sentiment, with the US Dollar price-dynamics playing a secondary role amid absent fundamental drivers.

Technical levels to watch

Momentum above the 109.00 handle is likely to confront resistance near 109.20-25 region, above which the pair is likely to aim towards 109.40-50 horizontal resistance. A follow through buying interest seems to assist the pair back towards reclaiming the key 110.00 psychological mark.

On the downside, 108.45-40 zone remains immediate support to defend, which if broken could accelerate the slide towards the 108.00 handle before the pair eventually drops to test 107.70 support.