USD/JPY building on Friday’s sharp recovery gains, surges past 102.00

Extending its sharp rebound from 100.00 psychological mark, the USD/JPY pair reclaimed 102.00 handle and is seen building on to its gains to currently trade at 11-day high level around 102.25.

The Fed Chair Janet Yellen's speech at Jackson Hole symposium and hawkish comments from Fed Vice Chairman Stanley Fischer on Friday have increased prospects of an eventual Fed rate-hike action by the end of this year and has been fueling bullish momentum for the greenback across the board. 

Today's release of Core PCE Price index (Fed's preferred inflation gauge), personal spending and income data from the US would be looked upon for reinforcement of Fed rate-hike expectations and eventually have an impact on the major.

Technical levels to watch

From current levels, 102.60-65 region (monthly highs) is likely to act as immediate resistance, which if conquered should clear path for further near-term recovery towards 103.90-104.00 resistance area with intermediate resistance around 103.00 round figure mark.

On the flip side, sustained weakness back below 102.00 handle immediate support seems to drag the pair back towards 101.25-20 region. Weakness below this 101.25 support is likely to be bought into and hence, should be limited till 100.75 strong support area.