USD/JPY eyeing to reclaim 102.00 handle

Having dropped to a 5-day low during early European session on Tuesday, the USD/JPY pair has managed to recover majority all of its lost ground and has now turned flat to currently trade just few pips away from session high near 102.00 handle. 

The greenback, as measured by the overall US Dollar Index, seems to have found some buying interest at lower levels. Moreover, lack of clarity over the next monetary policy move from the Federal Reserve and Bank of Japan has led to the prevalent uncertain environment. Given the uncertainty, traders might be reluctant to take positions ahead of the big event risks, which could have possibly led to a tepid short-covering bounce around the major.

Next on tap would be US housing starts, which is expected to tick lower in August, along with the release of building permits that might show a further rise to a 6-month high level. 

Technical outlook

A team of analysts at AceTrader notes, "Despite the greenback's strong rebound from last Tuesday's low at 101.42 to 103.36 last Wednesday, subsequent strong retreat suggests the recovery from September's low at 101.21 has ended there and choppy trading with downside bias would be seen for weakness towards 101.42, below would confirm this view and yield re-test of 101.21 later this week."

"On the upside, only above 102.59 would indicate the pullback from 103.36 has ended instead and turn outlook bullish for gain towards 103.06."