USD/JPY off session low, moves back above 114.00 handle

The USD/JPY pair extended its profit-taking slide and broke through 114.00 mark but has now recovered around 25-pips from session low to currently trade around 114.10-15 region.

During early Asian session, the pair extended Wednesday's OPEC deal-led strong up-move beyond 114.00 handle and jumped to the highest level since Feb. 16. The decision by major oil producers to cut their production triggered a sharp rally in crude oil prices and pushed the US Dollar higher across the board on expectations of higher oil prices-led inflationary pressure that might lead to faster Fed rate-tightening cycle in 2017. 

Bulls, however, took a breather and turned cautious ahead of Friday's monthly jobs report (NFP) from the US, which would drive Fed rate-hike expectations, beyond December meeting, and hence, could act as next fundamental trigger for the pair's near-term trajectory.

In the meantime, investors on Thursday will gauge health of the US manufacturing sector from the release of ISM manufacturing PMI, later during NA session, which would also be looked upon to grab some short-term trading opportunities. 

Technical levels to watch

Weakness below session low support near 113.85 could get extended towards 113.40-35 horizontal support below which the pair is likely to drift below 113.00 handle and head towards testing its next support near 112.45 level. On the upside, 114.45 level now seems to act as immediate resistance, which if cleared now seems to lift the pair beyond session peak resistance near 114.80 level and aim towards 115.00 psychological mark.