USD/JPY recovery stalls at 101.00 level

As risk-aversion continues to dominate global financial markets, investors continued boosting demand for the perceived safety of the Japanese Yen and drove the USD/JPY pair to the vicinity of 100.00 psychological mark. The pair, however, has managed to recover from lower level and is currently hovering back around 101.00 handle. 

The US Dollar bulls some respite from a surprisingly stronger-than-expected US ISM manufacturing PMI print of 56.5, marking its highest since Nov. 2015 and surpassing the most optimistic estimates. However, prevailing global risk-off sentiment kept recovery limited below a previous support break-point, now turned resistance, near 101.50-40 area. 

Next in focus would be FOMC meeting minutes, later today and would assist investors to determine the timing of next Fed rate-hike decision. Traders will also look forward to the closely watched US economic indicator, NFP data, on Friday, which could provide some near-term momentum play for the USD/JPY pair.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "the 1 hour chart shows that the technical indicators are barely bouncing within oversold territory, whilst the 100 and 200 SMAs converge around 102.30, gaining bearish momentum. In the 4 hours chart, the technical outlook is quite alike, with indicators paring losses in oversold territory, but far from signaling a turnaround in price action.

"Support levels: 100.05 99.70 99.30
Resistance levels: 100.90 101.40 101.85"