USD/JPY headed for a fresh break-out momentum above 102.65
|Last week's stellar US monthly jobs report continues to extend support for the greenback, with the USD/JPY pair consolidating around 102.50 region after posting some meaningful recovery for two consecutive days.
On Monday, the pair managed to clear its immediate barrier near 102.25 region marking 23.6% Fibonacci retracement level of 107.49-100.68 downslide and now seems to be preparing to build on to its recent recovery gains.
On Tuesday, the pair had a mild negative reaction to Chinese inflation data but has managed to quickly bounce-off 102.25 resistance turned support level.
In absence of any major economic releases from the US until Friday and the upcoming summer holiday season in Japan is likely to take out some liquidity and reduce volatility. The pair, however, might continue to take cues from the prevalent risk sentiment around equity markets and any further buying interest surrounding the greenback.
Technical levels to watch
From current levels, momentum beyond 102.66 (Monday's high), leading to a strength above 102.83 (August 2 high), seems to assist the pair to break through 103.00 round figure mark and head towards testing its next major resistance near 103.25 level represented by 38.2% Fibonacci retracement level.
Conversely, sustained weakness below 102.30-25 session low support now seems to find support around 101.90 level, below which the pair could be headed back towards retesting 101.25-20 strong horizontal support.
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