USD/JPY inching closer towards monthly high

After last week's corrective slide to 103.00 neighborhood, the USD/JPY pair resumed with its near-term recovery trend and is now building on to momentum beyond 104.00 handle.

Currently trading at nearly two-week high level around 104.45 region, a broadly stronger greenback has been the key factor driving the pair higher for the second straight session. Market participants now seemed convinced that an eventual victory for Hillary Clinton at the upcoming US presidential elections would increase the likelihood of Fed rate-hike action in December. The CME group's FedWatch Tool is pointing to 68.0% probability of such an action in December and is boosting the greenback across the board, with the overall US Dollar Index, which measured greenback performance against its major counterparts, hitting a fresh 8-month high.

Moreover, improving investors' appetite for riskier assets, as depicted by minor gains in European equity indices, is further weighing on the safe-haven appeal of the Japanese Yen and assisting the pair to maintain its strong bid tone. 

Today's economic calendar features the release of Conference Board's Consumer Confidence Index for October and could provide fresh impetus for traders during early NA session. Later during US session, speeches from ECB President Mario Draghi and BoE Governor Mark Carney might infuse a fresh bout of volatility in the FX market and eventually derive the Japanese Yen's safe-haven demand.

Technical levels to watch

From current levels, 104.64 (Oct. 13 high) seems to act as immediate resistance above which the pair seems all set to reclaim 105.00 psychological mark and aim towards testing 105.50 horizontal resistance. On the downside, 104.00-103.90 area now seems to protect immediate downside which if broken is likely to drag the pair immediately towards 103.45-40 support area before the pair eventually heads back towards retesting 100-day SMA near 103.00 region.