USD/JPY snaps eight days of losing streak, recovers to mid-111.00s

Having tested fresh four month lows in the previous session, the USD/JPY pair staged a goodish recovery and is currently testing session tops near mid-111.00s.

Continuous rise in the US treasury bond yields underpinned the greenback demand, helping the key US Dollar Index to move away from multi-week lows touched earlier this week and snapping the pair’s eight consecutive days of losing streak. 

Adding to this, the disappointing release of Flash Japanese Manufacturing PMI print for March was seen weighing on the Japanese Yen. This coupled with buoyant investors sentiment, as depicted by positive trading cues in equity markets, further dented the Japanese Yen's safe-haven demand and collaborated to the pair's strong recovery move on the last trading day of the week.

It, however, remains to be seen if the pair is able to build on to the momentum or runs into some fresh supply amid growing uncertainty over Trump's new healthcare bill, due for  a vote on Friday between 2 P.M. EDT and 4 P.M. EDT, i.e., 1800-2000GMT.

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Today's US economic docket features the release of durable goods order and would be looked upon for fresh impetus during early NA session. In the meantime, broader market risk sentiment and the US treasury bond yield dynamics would remain key determinants for the pair's movement. 

Technical levels to watch

On a sustained move above mid-111.00s, the pair is likely to accelerate the recovery move towards 111.70-75 resistance, above which a fresh bout of short-covering is likely to lift it beyond the 112.00 handle towards testing its next hurdle near 112.20-25 area.

Meanwhile on the downside, the 111.00 handle now become immediate strong support to defend, which if broken decisively would turn the pair vulnerable to extend its near-term downward trajectory towards its next support near 110.35 level.