USD/JPY retreats from high, still well-bid above 117.00 handle

The USD/JPY pair was seen building on overnight strong recovery move and recorded nearly 250-pips of gains from 115.00 neighborhood touched on Friday. 

Currently trading around 117.20 region, Friday's reading on the US labor market revived the Trump-led strong US Dollar rally and is supporting the pair bid tone for the second consecutive session.  The closely watched non-farm payrolls report refueled expectations of inflationary pressure in the US economy and increased prospects of steeper Fed rate-hike path in 2017, eventually lending support to the prevalent bullish sentiment surrounding the greenback. 

However, a mildly cautious sentiment around riskier assets - like equities, lend support to the Japanese Yen's safe-haven appeal and restricted further up-move for the pair near mid-117.00s.

With Fed rate-hike expectations once again taking the centre stage, today's speech from Fed’s Rosengren and Lockhart, due later during NY session, would now be looked upon for fresh impetus ahead of the Fed Chair Janet Yellen's appearance on Thursday. 

Technical levels to watch

A follow through buying interest above 117.50 resistance is likely to lift the pair towards 117.75 resistance area above which a fresh bout of short-covering could lift the pair beyond 118.00 handle towards its next resistance near 118.20-25 region.

On the downside, weakness back below 117.00 handle is likely to accelerate the slide towards 116.50 support, which if broken might drag the pair back towards 116.00 strong support.