USD/JPY erases majority of Monday’s gains, descends to 102.00 mark

After two days of strong up-moves the US Dollar bulls took a breather, with the USD/JPY pair extending its retracement from a 4-day high level touched on Monday to currently trade near session low around 102.00 handle.

On Monday, the pair continued to benefit from Friday's blockbuster employment details from the US, which fueled speculations of an imminent Fed rate-hike decision by the end of this year. 

However, the greenback lost its upside momentum on Tuesday and the pair erased majority of its gains recorded on Monday. 

The selling pressure got an additional boost after the release of US prelim nonfarm productivity data that showed a decline of 0.5% in the second quarter of 2016, which was well below 0.4% expected rise. 

Next on tap would be IBD/TIPP’s Economic Optimism index later during NY trading session.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "Technically, the short term picture is modestly bullish, given that the price is above its 100 SMA whilst the RSI aims higher around 71, although the 200 SMA contains the upside, providing an immediate resistance at 102.60. In the 4 hours chart, technical readings also favor the upside, as indicators head north within positive territory, whilst the price remains well below their moving averages. This month high has been set at 102.83, which means a firm advance beyond it is required to confirm further gains beyond the 103.00 level."

"Support levels: 102.10 101.80 101.50
Resistance levels: 102.60 102.85 103.10"