The USD/JPY pair got an additional short-covering boost that lifted the pair beyond 102.00 handle to a 4-day high level of 102.14. The pair, however, has trimmed some of its gains and is currently trading back below 102.00 level. 

  The US Dollar continues to benefit from last Friday's surprisingly strong US employment report for the month of June and provide the initial boost to the USD/JPY pair. Meanwhile, the Japanese currency came under intense selling pressure after the Japanese Prime Minister Abe confirmed that he will instruct Econ minister Ishihara to prepare a fresh stimulus package to support fragile economy and combat deflation.

  Adding to the bearish sentiment, strong rally across global equity markets is further denting the safe-haven appeal of the Japanese currency. Traders rushed to cover their bearish USD bets once the pair started trading decisively above previous support turned strong resistance near 101.40-50 region that provide the required boost to lift the pair back above 102.00 handle. 

  Going forward, with very little in terms of economic releases from the US, the pair might continue to take cues from global risk sentiment. Moreover, given the possibilities of announcement of further stimulus measures, as early as tomorrow, the pair seems more likely to maintain its strong bid tone. Any dips might be utilized to build on to the bullish positions and hence, could be short-lived. 

  Technical levels to watch

 

  On a sustained strength above 102.00 handle, the pair seems to head back towards 102.50-55 resistance above which the pair could be all set to extend its recovery trend in the near-term. On the flip side, weakness back below 101.70, leading to a subsequent break below 101.50-40 area, would negate bullish bias and turn the pair vulnerable to resume its near-term downward trajectory, according to HY Markets analysts (rated among the TOP Forex Brokers Masterforex-V World Academy http://www.masterforex-v.com/).