USD/JPY recovers some lost ground ahead of US data

The USD/JPY pair resumed with its tepid recovery bounce, moving back close to session high and is currently trading just below 101.50 region. 

Having erased post-NFP recovery gains, the pair has managed to find some buying interest around 101.00 handle. However, the recovery remained tepid as markets now seem convinced that the Federal Reserve will leave interest rates unchanged for the rest of 2016.

Hence, any disappointment from today's US economic releases that include - weekly jobless claims and import price index might trigger a fresh leg of selling pressure around the greenback. However, better-than-expected data could provide a much needed respite for the US Dollar and trigger near-term short-covering bounce for the USD/JPY major.

Technical outlook

Omkar Godbole, Editor and Analyst at FXStreet, notes, "Pair’s oversold status as per the hourly RSI may come to the rescue and help the pair hold above previous day’s low of 100.96, in which case, an upside break to 101.40-101.50 appears likely. 5-DMA and 10-DMA aren’t sloping downwards anymore, which adds credence to the possibility of an up move today."

"Beach of resistance at 101.40-101.50 could yield a move higher to 102.11 (61.8% of 98.787-107.494). On the lower side, a day end close below 100.71 (50% of 2011 low-2015 high) could spell trouble for the USD bulls."