USD/JPY bounces-off session low, eyeing 101.50 for further recovery

The USD/JPY pair is seen building on to its losses recorded on Tuesday and dropped to 101.12 before retracing few pips to currently trade around 101.35-40 band. 

An unexpected decline in second-quarter productivity data from the US, released on Tuesday, triggered the initial leg of downslide for the pair. The fall got further aggravated as markets now seemed convinced that the Fed is unlikely to move towards normalizing monetary policy during 2016, which led to a broad based weakness for the greenback.

In absence of any important releases until Friday's monthly retail sales data from the US, the pair seems unlikely to gain any respite amid cautious sentiment surrounding equity markets that might boost the safe-haven appeal of the Japanese currency and restrict any swift recovery for the pair.

After today’s slide for second day running, the pair has erased all of its strong NFP data-led recovery gains. Hence, any further selling pressure below 101.00 round  figure mark would turn the pair vulnerable to further downslide in the near-term.

Technical levels to watch

Resistance can be found at 101.60 (Daily Classic S1), 101.76 (Hourly 100 SMA), 101.77 (Hourly 20 EMA), 101.79 (Yesterday's Low) and 101.80 (Weekly Classic PP).

Below, we can see support at 101.32 (Daily Classic S2), 101.22 (Weekly Low), 101.12 (Daily Low), 100.90 (Monthly Low) and 100.85 (Daily Classic S3).