USD/JPY off session low, still weaker below 118.00 handle

After once again failing to sustain its move above 118.00 handle, the USD/JPY pair dropped to fresh session low near 117.35 region before recovering around 25-pips to currently trade around 117.60 region. 

The US Dollar remained broadly on the back foot, primarily led by some profit-taking after hitting a fresh 14-year high on Wednesday. Adding to this, cautious sentiment around equity markets is lending additional support to the Japanese Yen's safe-haven appeal and weighing on the major. 

The corrective slide, however, remained shallow as investors now awaited for the release of minutes from the Federal Reserve’s most recent meeting, when the central bank raised interest-rates for the first time in 12-months. The minutes might provide fresh insight over the Fed's monetary policy outlook for 2017 and help investors determine the pair's near-term trajectory. 

The Fed has already hinted towards aggressive monetary tightening in 2017, in anticipation of a stronger US economic growth led by President-elect Donald Trump's aggressive fiscal policies, and hence, hawkish details from today's minutes could turn out to be a significant catalyst adding to the well-established strong greenback bullish trajectory and continue driving the pair higher in the near-term. 

Technical levels to watch

From current levels, bullish momentum back above 118.00 handle might continue to confront resistance near 118.20-25 resistance area above which the pair is likely to attempt a fresh move towards multi-month highs resistance near 118.60-65 region. On the downside, weakness below 117.35 level (session low) is likely to find support near 117.20 (yesterday's low), which if broken has the potential to drag the pair below 117.00 handle towards its next support near 116.55-50 region.