USD/JPY back below 101.00 level, drops to session low at 100.65

The USD/JPY pair's late retracement on Wednesday got sold into near 101.40-50 support turned resistance and the pair is now extending its weakness below 101.00 handle to currently trade near-session low level around 100.65-70 band.

On Wednesday, the pair dropped to the vicinity of 100.00 psychological mark as risk-off sentiment drove investors to the perceived safety of Yen. The bears took a breather after a stronger-than-expected US ISM non-manufacturing PMI helped investors to shrug-off some Brexit-led worries. Adding to this, dovish June FOMC meeting minutes further cooled investors' nervousness and drove risk-on trade, assisting the pair to recover swiftly from lower levels. 

On Thursday, the pair resumed its weakening trend despite of a slight improvement in global risk sentiment as investors now shift focus to the scheduled release of US monthly employment report on Friday, which would assist traders to determine the near-term direction of the USD/JPY major.

Technical levels to watch

On the immediate downside, bulls would like to defend 100.00 psychological mark support, which if broken should immediately drag the pair back towards Brexit swing-lows support near 99.00 round figure mark. Meanwhile on the upside, momentum above 101.00 handle might continue to face strong resistance near 101.40-50 region. Only a decisive strength above this immediate strong resistance would negate any further near-term bearish momentum and could assist the pair to move back above 102.00 level and towards testing 102.50 horizontal resistance.