USD/JPY consolidating gains near 105.00 handle after US data

The USD/JPY pair had a muted reaction to US economic data and was seen consolidating its gains to 105.00 handle. 

After a weekly bearish gap opening, the pair managed to register a goodish recovery amid broad based greenback strength on growing market expectations that the Fed would eventually move towards raising interest rates by the end of this year. The momentum, however, failed to gain further traction after mostly in-line US economic data. 

Data released from the US showed, the Fed's preferred inflation gauge - Core PCE Price Index, rose 0.1% on a monthly basis, while yearly rate held steady at 1.7%. Both the monthly and the yearly prints were bang in-line with consensus estimates and failed to provide any impetus for the pair.

Meanwhile, personal income for September registered a slightly lower-than-expected growth of 0.3% but was still better-than 0.2% growth recorded in August. A slight disappointment from personal income was further negated by upbeat personal spending data, which recorded a growth of 0.5% as compared to 0.4% expected and 0.1% contraction in the previous month. 

Moving ahead, this week's key focus would remain on Tuesday's BOJ decision and the outcome of FOMC meeting scheduled to be announced on Wednesday. Later during the week, investors will also confront one of the most important market moving releases from the US, monthly jobs report, which is popularly known as NFP.

Technical levels to watch

From current levels, 105.25-30 area is likely to act as immediate resistance above which the pair is likely to aim towards 105.75-80 intermediate resistance en-route 106.00 handle. On the downside, weakness below 104.70 immediate support could get extended towards session through support near 104.40 region before the pair eventually drops to 104.10 strong horizontal support.