After an initial dip to 103.68, the USD/JPY pair has managed to recover over 30-pips from session through and is now making a fresh attempt to build on to its move back above 104.00 handle.
On Monday, the pair once again ran through fresh offers near 104.40-50 strong supply zone and reversed part of Friday's gains on disappointing US manufacturing data. The downslide, however, was limited and could be categorized as a corrective pause as the pair continued holding its neck above 100-day SMA.
Improving investor risk-appetite on Tuesday helped the pair to recover some of its Monday's lost ground as investors now look forward to the release of US CPI print for the month of September later during NA session. Also in focus would be key Chinese macro releases, including quarterly GDP growth and industrial production data, which would be a key determinant of market risk sentiment and derive the Japanese Yen's safe-haven demand.
Technical levels to watch
From current levels 104.20 horizontal zone seems to act as immediate resistance above which the pair seems to make a fresh attempt towards clearing an important resistance near 104.40-50 area. A convincing move above this strong resistance should now pave way for further near-term recovery towards 105.00 psychological mark.
Meanwhile on the downside, weakness below 103.70 (session low) support is likely to accelerate the slide immediately towards 100-day SMA support near 103.20-15 region, which if broken seems to drag the pair towards 102.75 support.