USD/JPY stages a sharp recovery, retakes 109.00 handle and beyond

The greenback selling pressure seems to have abated for the time being, helping the USD/JPY pair to recover back above the 109.00 handle.

Earlier during Asian session the pair tumbled to its lowest level since Nov. 17 in the aftermath of the US President Donald Trump's remarks on the strength of the US currency. 

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Adding to this, rising tensions over the US relations with Russia and North Korea continued driving investors away from riskier assets. The prevalent risk-off environment was further reinforced by a slump in the US treasury bond yields and remained supportive for the Japanese Yen's safe-haven appeal.

Meanwhile, a late recovery in Asian equity markets, coupled with broad based US Dollar recovery, seems to have triggered a short-covering bounce from the vicinity of 200-day SMA important support.

Later during the NA session, the US economic docket would now be looked upon for some fresh impetus. In the meantime, broader market risk-sentiment and the USD price-dynamics would continue to influence the pair. 

Technical levels to watch

Any further recovery move now seems to confront immediate resistance near 109.50-55 area, above which a fresh bout of short-covering could easily lift the pair back towards the key 110.00 psychological mark ahead of its next resistance near 110.20-25 horizontal zone. 

Conversely, weakness back below the 109.00 handle might continue to find support near 108.70-60 region (200-day SMA), which if broken decisively is likely to accelerate the downslide further towards 108.00 mark, en-route mid-Nov. lows support near 107.75 level.