USD/JPY recovery gains traction, jumps close to 104.50

After initially sliding to retest 103.60-55 multi-month lows support, prevailing risk-on sentiment helped the USD/JPY pair to bounce-off session low and move back above 104.00 handle.

Currently trading comfortable above 104.00 level, at 104.35, the pair on Monday failed to build on to its morning bullish price-gap and dropped into negative territory. The selling pressure extended till early Asian trading session on Tuesday before a fresh bout of risk-on trade attracted bids, boosting the pair close to the mid-point of 104.00-105.00 handle.

Earlier on Tuesday, BoJ's latest monetary policy meeting minutes revealed that the central bank wanted to see the benefits of previous easing measures and were not hesitant to ease further, if needed. The comments sounded dovish that increased the prospects of further easing and lifted the USD/JPY pair higher. 

However, given the uncertainty surrounding the crucial Brexit referendum might continue to restrict any sharp recovery for the pair.

Technical levels to watch

From current levels, any further upside might continue to confront immediate resistance near 104.80-85 area, above which the pair seems all set to extend its recovery trend, beyond 105.00 psychological mark resistance, towards testing a previous important support, now turned immediate strong resistance, near 105.50 area. 

On the flip side, failure to extend its recovery trend and a drop back below 104.00 round figure mark might increase the pair's vulnerability to break through 103.60-55 support and head towards 103.00 round figure mark support.