USD/JPY fast approaching 105.00 psychological mark

A fresh bout of greenback buying interest seems to have emerged during early NA session, lifting the USD/JPY pair to nearly 3-month highs.

Currently trading around 104.85 region, the pair maintained its strong bid tone for the second consecutive day and is now fast approaching 105.00 psychological mark amid increasing prospects of an eventual Fed rate-hike action by the end of this year.

Meanwhile, the prevalent cautious sentiment around equity markets might continue to underpin the Japanese Yen's safe-haven appeal and might restrict further upside for the major.

Next of relevance would be the Conference Board's Consumer Confidence Index for October, which is expected to retreat to 101.0 from 104.1 recorded in September. A surprisingly stronger reading would provide additional boost to the US Dollar and trigger a fresh leg of up-move for the major. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "technical indicators have retreated from near overbought readings, suggesting that the buying interest diminishes as the price approaches the critical 105.00 level. In the 4 hours chart, however, technical readings support a new leg higher, given that the momentum indicator heads sharply lower well above its 100 level, the RSI indicator consolidates around 66, and the 100 SMA extended its advance below the current level."

"Support levels: 104.25 103.70 103.30
Resistance levels: 104.60 105.05 105.50"