USD/JPY fails to extend recovery momentum

Having touched a session high at 101.24, the USD/JPY pair erased all of its early recovery gains and has now turned absolutely flat amid cautious market sentiment.

Currently trading around 100.75 region, the pair came under renewed selling pressure as weakness in European equity markets extended support to perceived safety of the Japanese Yen. 

Moreover, the greenback, as measured by the US Dollar Index, also seems to have lost is upside momentum and failed to assist the pair to build on to its recovery from a multi-week low touched on Thursday in the aftermath of disappointment from BOJ and the Fed monetary policy decision.

With short-term technical indicators already move out of near-term oversold territory, any subsequent weakness might attract fresh selling pressure and accelerate the downslide for the pair.

Technical levels to watch

Immediate downside support is seen near 100.35 level below which the pair is likely to head back towards retesting 100.00 psychological mark. Meanwhile, momentum above session high resistance near 101.25 seems to confront resistance at 101.40 level, which if cleared has the potential to lift the pair further towards 101.80 resistance area.