USD/JPY reclaims 102.00 handle amid prevalent risk-on sentiment

Haresh Menghani FXStreet

The prevalent risk-on sentiment helped the USD/JPY pair to bounce-off session low and reclaim 102.00 handle. The major is now seen building on to its gains to currently trade comfortably above 102.00 handle.

The greenback continues to benefit from increasing Fed rate-hike expectations, which got an additional boost from Monday's US economic data that showed core PCE price index, the Fed's preferred inflation gauge, at 1.6% y-o-y in July inched closer to the central bank's 2% target.

Meanwhile, the Japanese Yen seems to ignore today's release of better-than-expected employment report from Japan. According to the report, the unemployment rate in July dropped to 3.0%, the lowest level in 21 years. Market seemed convinced that BoJ will ease further at its meeting in September and seems to extend support for the USD/JPY major.

Later during US session, traders will take short-term trading cues from the release of the Conference Board's US consumer confidence index for August, while the key determinant would remain Friday's monthly jobs report from the US - popularly known as NFP.

Technical levels to watch

From current levels, momentum above 102.39 (Monday's high) seems to lift the pair towards 102.60-65 region (monthly highs) strong resistance, above which the near-term recovery trend is likely to get extended towards 103.90-104.00 resistance area with 103.00 round figure mark acting as intermediate resistance.

On the flip side, sustained weakness back below 102.00 handle, leading to a drop below 101.75 (session low), seems to drag the pair back towards 101.25-20 region. Weakness below 101.25-20 support is likely to be bought into and hence, should be limited till 100.75 strong support area.

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bullish	Neutral	Low
1H	Bullish	Neutral	Shrinking
4H	Bearish	Overbought	High
1D	Bullish	Neutral	Expanding
1W	Bullish	Neutral	Low
Updated Aug 30, 05:15 GMT

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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