USD/JPY finds some support near 112.00 handle

The USD/JPY pair found some decent support near the 112.00 handle and has managed to pare some of its early profit taking slide from six week tops touched in the previous session.

A fresh wave of global risk-aversion trade boosted the Japanese Yen's safe-haven appeal and prompted traders to take some profits off the table, especially after the pair's strong upsurge of over 100-pips since the beginning of this week. 

However, the prevalent bearish sentiment surrounding the greenback, with the key US Dollar Index hovering near yearly lows, helped limit further downslide, at least for the time being. The greenback remained on the back foot in wake of a delay of the health-care bill vote by the US Senate, which raised concerns over Trump administration's ability to push through pro-growth economic policies, like tax reform and infrastructure spending. 

Adding to this, Tuesday's less dovish comments by the ECB President Mario Draghi further collaborated to the bearish sentiment surrounding the buck, with bulls failing to find any respite from the Fed Chair Janet Yellen's remarks that rate-increase would be gradual.

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Moving ahead, comments coming from Central Bankers panel discussion at the European Central Bank Forum on Wednesday might influence investors’ risk-appetite and provide some fresh impetus. From the US, the release of pending home sales data would also be looked upon to grab some short-term trading opportunities.

Technical levels to watch

Weakness below the 112.00 handle is likely to find support at 100-day SMA near 111.80 region, which if broken is likely to extend the corrective slide further towards 111.45 horizontal support.

On the upside, momentum back above 112.30-35 region now seems to pave way for continuation of the pair’s strong up-move further towards the 113.00 handle with some intermediate resistance near 112.75 area.