USD/JPY turns neutral, eyeing to reclaim 103.00 handle

After an initial dip to 102.67 level, the USD/JPY pair recovered its lost ground and has now turned neutral to move within striking distance of 103.00 handle. 

The pair built on to its overnight strong gains above 50-day SMA and extended its recovery trend from the vicinity of 100.00 psychological mark touched in the previous week. In absence of any economic releases, the ongoing strong up-move could be attributed to the prevalent risk-on market sentiment and is reaffirmed by a sharp slide in gold, which dropped to the lowest level since the historic Brexit referendum.

Moving ahead, investors on Wednesday will focus on US economic releases, which if adds to the recent upbeat data would revive hopes of an eventual Fed rate-hike action and boost the greenback further from current levels. Today's US economic docket features the release of ADP report, trade balance data, ISM non-manufacturing PMI and factory orders.

Technical levels to watch

From current levels 103.00 round figure mark is likely to act as immediate resistance above which the pair is likely to dart towards 103.35 (Sept. 14 high) and further towards 100-day SMA resistance near 103.75 region.

On the downside, weakness below session low support near 102.67 could get extended towards 102.50 level. Dips below 102.50 support are likely to get bought into near 102.25 intermediate support and hence, is likely to limit any further downside near 102.00 round figure mark.