USD/JPY continues gaining traction further beyond 110.00 handle

The USD/JPY pair continued gaining traction through early NA session and jumped back above the key 110.00 psychological mark, reversing all of Wednesday's losses to nearly two-month lows.

Today's upbeat US economic data - weekly jobless claims and regional manufacturing indices - Empire State and Philly Fed, helped the US Dollar to build on post-hawkish FOMC statement led recovery move from yearly lows and lifted the pair further beyond the 110.00 handle.

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The pair has now jumped back closer to weekly tops resistance near 110.40-45 region and is likely to test bulls commitment amid prevalent risk-off environment, which tends to benefit the Japanese Yen’s safe-haven appeal.

Focus now shifts to the next big event risk – BoJ monetary policy decision, due to be announced during Asian session on Friday, which would now act as the next big fundamental trigger for the pair’s near-term trajectory.

Technical outlook 

Valeria Bednarik, Chief Analyst at FXStreet write: "From a technical point of view, the  recovery is not enough to revert the negative tone of the pair, still facing a strong resistance at 110.50, a major Fibonacci resistance and where the pair has now the 100 SMA in the 4 hours chart. Technical indicators in the mentioned time frame head higher above their mid-lines, sufficient at least, to keep the downside limited. Beyond the mentioned resistance, the recovery can extend up to the 111.30 region, without actually affecting the dominant bearish trend."