USD/JPY digesting recent strong gains, holds above 103.00 mark

The USD/JPY pair stalled 6-days winning streak and dropped to 103.00 handle during early Asian session before recovering majority of its lost ground to currently trade around 103.35-40 band. 

The pair on Wednesday continued with its strong recent recovery trend and ended at monthly highs ahead of this week's crucial Non-Farm Payrolls on Friday, which would help investors determine the Federal Reserve's next monetary policy move and eventually drive the greenback in the near-term. Wednesday's up-move was supported by slightly better-than-expected private-sector employment report (ADP report) from the US, which further fueled speculations of an imminent Fed rate-hike action in coming months. Meanwhile, the Japanese currency remained under intense selling pressure across the board amid expectations of further monetary easing by the BoJ. 

Heading into Friday's big event risk, the prevalent cautious sentiment around equity market on Thursday is seen extending some support to the safe-haven appeal of the Japanese Yen and hindering the pair's ongoing bullish momentum.

The release of ISM manufacturing PMI will be key highlight from the US economic calendar on Thursday, which also features the release of weekly jobless claims and the revised version of non-farm productivity for second-quarter of 2016.

Technical levels to watch

On the upside, bullish momentum above 103.50 resistance seems to boost the pair immediately towards 103.90 intermediate resistance before the pair extends its upward trajectory towards its next major resistance near 104.45-50 region. Meanwhile on the downside, weakness below 103.00 round figure mark now seems to find support at 50-day SMA near 102.60-55 region, which if broken should drag the pair back towards 102.00 handle support.