USD/JPY clings to strong gains above 102.00 handle

The USD/JPY pair maintained its strong bid tone and is now sustaining its move beyond 102.00 handle, albeit finding some resistance near mid-102.00s.

Currently trading around 102.35 region, the pair has retraced few pips from session high but has held above 50-day SMA for majority of the Tuesday's trading session amid prevalent risk-on sentiment, which is weighing on the safe-haven demand of the Japanese Yen. 

Meanwhile, the greenback, as measured by the overall US Dollar Index, continues to benfit from Monday's surprisingly strong-than-expected release of US ISM manufacturing PMI and extended its overnight gains. 

In absence of any market moving economic releases from the US, the pair would continue to take cues from the prevalent risk sentiment as market participants continue to reposition themselves ahead of this week's key event risk, non-farm payrolls data on Friday.

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet, notes, "the pair has repeatedly failed to hold above 50-DMA for more than three trading session this year. Hence, caution is advised, unless the resistance at 103.36 is breached on daily closing basis, in which case a major hurdle at 105.50 could be put to test. The odds of the pair capitalizing on the bullish break above 50-DMA are high this time, given we are coming-off repeated failed attempts to breach 100.71 (50% of 2011 low – 2015 high) on the monthly chart."

"On the downside, failure to take out triangle resistance today followed by a break below Asian session low of 101.57 could yield re-test of 101.00 levels."