USD/JPY bounces off 15-month lows, back above 107.00 handle

   •  JPY continues to benefit from the risk-off mood. 
   •  Renewed USD weakness adds to the downward pressure.
   •  Investors await key US macro data for fresh directional impetus.

The USD/JPY pair reversed an early dip to sub-107.00 level and has managed to rebound around 35-40 pips from 15-month lows, albeit seemed lacking any strong follow-through traction.

The pair extended overnight bearish break below the 108.00 handle and remained under some intense selling pressure through the Asian session on Wednesday. Fragile risk sentiment, following the recent rout across global equity markets, underpinned the Japanese Yen's safe-haven appeal and continued exerting downward pressure for the third consecutive session. 

Meanwhile, the US Dollar extended last week's retracement slide from levels beyond the 90.00 handle and further contributed to the pair's downfall to an intraday low level of 106.84, the lowest since Nov. 14. 

Moving ahead, today's key US macro data - the latest inflation figures, along with the release of US monthly retail sales data, would now be looked upon for some immediate respite for the USD bulls.

Technical levels to watch

Immediate resistance is pegged near mid-107.00s, above which a fresh bout of short-covering could lift the pair back towards 107.80 level en-route the 108.00 handle. On the flip side, weakness back below the 108.00 handle, leading to a subsequent break below 106.85 level, now seems to pave the way for a continuation of the pair's bearish trajectory towards the 106.00 handle.

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