USD/JPY extends recovery move, hits fresh session high

Following yesterday's slump to two-month lows, the USD/JPY pair staged a goodish recovery on Wednesday and is now building on to its move back above 113.00 handle.

The US Dollar reversed part of Tuesday's sharp slide led by comments from Trump and Peter Navarro, head of Trump's recently formed National Trade Council, criticizing Germany, Japan and China for devaluing their currencies. The comments added on to lingering concerns over Trump's executive order to restrict travelers from seven predominantly Muslim countries and weighed heavily on the greenback.

Traders now seem to reposition themselves ahead of a slew of important US macro releases later during the day. Today's US economic docket features the release of ADP report on private sector employment and ISM manufacturing PMI. Later during NY session, the FOMC is scheduled to announce its monetary policy decision and is expected to leave key interest-rates unchanged. However, the accompanying statement would be scrutinized for any comments over the US Dollar strength. 

Technical levels to watch

A follow through buying interest is likely to assist the pair towards 113.75-80 resistance area above which the pair seems all set to reclaim 114.00 handle and head towards testing its next resistance near 114.50-55 region.

On the downside, weakness back below 113.00 handle now seems to find support near 112.80-75 region, which if broken is likely to turn the pair vulnerable to continue with its recent downslide back towards testing 112.00 handle, with some intermediate support near 112.50 region.