USD/JPY extends ECB-led momentum back above 114.00 handle

The US Dollar extended post-ECB appreciating move, with the USD/JPY pair rising to 4-day high and inching closer to weekly high touched at the beginning of week. 

Currently trading around 114.40 region, resurgent greenback buying interest in wake of Thursday's ECB decision to extend its bond-purchase program until Dec. 2017, albeit at a reduced pace of €60 billon per month beginning April 2017, has been the key factor driving the pair higher for the second consecutive session from the vicinity of 113.00 handle (3-day low). 

Moreover, the prevalent risk-on mood, as depicted by buoyant sentiment around equity markets, especially continuing up-surge in the US equity indices to record levels, is driving investors away from the perceived safety of Japanese Yen and providing an additional boost to the bid tone surrounding the major.

On economic data front, the release of Prelim UoM Consumer Sentiment from the US would now be looked upon for short-term momentum play, while broader market risk sentiment and USD price dynamics would continue to be key drivers for the major. 

Technical levels to watch

A follow through buying interest above 114.50 resistance is likely to boost the pair towards recent multi-month highs resistance near 114.80 region before the pair attempts a move towards reclaiming 115.00 psychological mark. On the downside, 114.00 handle now seems to protect immediate downside, which if broken is likely to drag the pair back towards 113.40 intermediate support en-route weekly lows support near 112.85 region.