USD/JPY trims gains, still holding with minor strength at 103.50

The USD/JPY pair remained in recovery mode but seems to be losing momentum and has now retraced few pips from session peak to currently trade around 103.55-50 band.

On Monday, the pair lost ground after BOJ Governor Haruhiko Kuroda failed to provide strong hints towards further monetary easing. The pair, eventually, erased majority of its Friday's post-NFP gains but once again managed to find some buying interest around 103.00 support area. 

From technical perspective, the pair is struggling to build on to its recent recovery gains and is confronting supply pressure around 104.00 handle. However, considering that the pair has decisively broken out above an important confluence resistance near 102.65-70 region, comprising of 50-day SMA and 38.2% Fibonacci retracement level of 107.49-99.54 downslide, the ongoing price-action could be seen as consolidation phase before the pair resumes with its near-term recovery trend.

Later during NY session, the release of US ISM services PMI print would provide some impetus for short-term traders, while main focus would remain on BOJ and the Federal Reserve monetary policy decision later during the month.

Technical levels to watch

On the upside, 103.90-104.00 remains immediate barrier, which if cleared should lift the pair immediately towards 104.50 horizontal resistance. Meanwhile a sustained weakness below 103.00 handle is likely to drag the pair back towards confluence resistance break-point, now turned support near 102.65-70 region.