USD/JPY recovers losses, challenges 101.30

The US dollar erased losses versus its Japanese counterpart as we step into early Europe, now pushing USD/JPY further beyond 101 handle.

USD/JPY making lower bottoms on daily sticks

The Japanese yen gave up all the gains and now trades muted against its American peer, as BOJ deputy governor Iwata’s comments inspired was short-lived. The major staged a solid recovery from below 101 handle and reverted to the familiar range around 101.25 levels as the US dollar turned positive against its major competitors, resuming the recent US ADP jobs data-led upside bias.

The dollar-yen pair also found renewed impetus from a turnaround in the Japanese stocks, with the benchmark Nikkei 225 index flipping back to gains, now up +0.45%. Next of note for the major remains the US macro releases due for the balance of the week, with the main highlight being the US payrolls data due Friday.

USD/JPY Technical levels to watch

In terms of technicals , the immediate resistance is located at 101.37 (daily high). A break above the last, the major could test 101.62 (5-DMA). While to the downside, the immediate support is seen at 100.86 (daily low) and below that at 100.02/100 (Jul 8 low/ big figure).